Palm oil prices rise on China's antidumping probe and the weakening ringgit
The price of Malaysian palm oils futures rose on Tuesday. This was the fourth session in a row that they have gained. This is due to China starting an anti-dumping investigation into canola imported from Canada, and also a weaker ringgit.
By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange was up 45 Ringgit or 1.14% to 3,978 Ringgit ($909.67).
China announced on Tuesday that it will launch an anti-dumping probe into canola imported from Canada after Ottawa imposed tariffs on Chinese Electric Vehicles, sending the prices of domestic rapeseed futures to their highest level in a month.
China's rapeseed meal futures prices jumped 6.03%.
The market is awash with ambiguity. This news about China investigating Canola Oil being dumped in China, said Paramalingam Supramaniam at Selangor brokerage Pelindung Bestari.
The Malaysian Ringgit, the palm oil industry's currency, fell 0.53% in value against the US dollar. Palm oil becomes more appealing to foreign currency holders when the ringgit is weaker.
Dalian's palm oil contract rose by 1.66%, while the most active soyoil contract grew by 1.71%. Chicago Board of Trade fell 0.55%.
As they compete to gain a share of the global vegetable oil market, palm oil monitors price movements for related oils.
According to Amspec Agri, Malaysian palm oil exports in August totaled 1,376,412 tons.
Intertek Testing Services, a cargo surveyor, said that exports of Malaysian products containing palm oil for August dropped 9.9% from 1,604,578 tons in July to 1,445,442 tons.
Indonesia increased its crude palm oil benchmark price for September from $820.11 per metric ton to $839.53.
Brent oil prices dropped on Tuesday, as concerns about demand overshadowed any impact from the suspension of Libyan production and exports.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
According to Wang Tao, a technical analyst, palm oil could test support at 3,864 Ringgit per metric tonne, after failing to break through resistance at 3,966 Ringgit.
(source: Reuters)
