LONDON: Malaysian palm oil futures dropped to their lowest in nearly three years on Thursday, tracking overnight declines in related edible oils, before trimming some losses on the back of a weaker ringgit.

A weaker ringgit, palm’s currency of trade, typically lends support to the edible oil by making it cheaper for foreign buyers. The ringgit weakened by 0.1 per cent against the dollar to 4.0395 on Thursday evening.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was down 0.8pc at 2,186 ringgit ($541.16) a tonne at the close of trade for a third straight session of losses. Earlier in the session, the contract shed as much as 1.3pc to 2,176 ringgit, its weakest since Sept 22, 2015. Trading volumes stood at 61,228 lots of 25 tonnes each at the close.

“Palm prices earlier weakened on China’s palm olein,” said a futures trader in Kuala Lumpur, referring to the palm contract on the Dalian Commodity Exchange. “Later, the weaker ringgit boosted sentiment.”

Published in Dawn, July 13th, 2018