KUALA LUMPUR, Oct 8: Malaysian crude palm oil futures ended 1.1 per cent lower on Monday, weighed down by declining prices of rival soybean oil and the strengthening ringgit against the dollar, traders said.
The benchmark December contract on the Bursa Malaysia Derivatives Exchange finished down 28 ringgit, or 1.1 per cent, to 2,542 ringgit ($750) a ton.
The bearish sentiment in soyaoil futures at the Chicago Board of Trade is spilling over to the palm oil market and this has made players take a good look at Dorab Mistry’s comments all over again, said one trader.
The appreciation of the ringgit has also pulled down the market because margins for foreign buyers have been affected, said another trader.
Other traded months fell between 29 and 120 ringgit in overall volume of 9,660 lots of 25 tons each.
Malaysian crude palm oil futures, which have been declining on weakness in rival soyaoil, are unlikely to bounce back soon, industry analyst Dorab Mistry told Reuters last week.
The Malaysian ringgit rose as far as 3.383 per dollar on Monday, up about 0.6 per cent as investors sought high-yielding currencies, spurred on by the dollar’s weakness.
A stronger ringgit makes the ringgit-based commodity expensive for overseas buyers.
Palm oil, used in products ranging from cosmetics and confectionaries to biodiesel, is 8 per cent off an historic high of 2,764 ringgit reached in June.
December palm oil on Singapore’s Joint Asian Derivatives Exchange was untraded but the January contract slightly up with only one contract traded.
In Malaysia’s physical market, crude palm oil for October shipment in the southern region was quoted at 2,640/2,660 ringgit a ton. Trades were not available.
