KUALA LUMPUR: Malaysian palm oil futures slipped to their lowest in over a week on Monday as gains in the local currency made the ringgit-denominated commodity more expensive for overseas buyers and refiners.

Malaysia’s ringgit outperformed regional peers to climb 0.42 per cent to 3.3415 on Monday, after the government decided to scrap fuel subsidies, a move seen helping state coffers save some 20 billion ringgit ($6bn) annually.

The benchmark February contract on the Bursa Malaysia Derivatives Exchange slipped to 2,200 ringgit in intraday trade, its lowest since Nov. 14, before settling 1.3pc lower at 2,204 ringgit ($658) per tonne by Monday’s close.

Total traded volume stood at 35,585 lots of 25 tonnes, above the usual 35,000 lots.

Market players say prices of palm, which have dropped more than 17pc so far this year, could be caught in range trading towards end-November and December unless there is a big change in its production or demand scene.

Supply of oil palm typically tightens towards the year-end as the rainy monsoon season hampers harvesting and yield growth, but export demand also dwindles as some foreign buyers cut back imports of the tropical oil that clouds in cold temperatures.

Published in Dawn, November 25th , 2014