KUALA LUMPUR: Malaysian palm oil futures extended losses on Thursday due to a drop in related vegetable oils and weak exports, though a weaker ringgit restricted the downside.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was down 0.75 per cent at 2,243 ringgit ($535.32) per tonne at close, after falling 1pc on Wednesday. The ringgit, palm oil’s currency of trade, weakened against the dollar by 0.19pc to 4.1900, making it more cheaper for foreign buyers.
“With falling ringgit, palm oil should have been trading on higher side, but weakness in competing oils is not allowing it to rise,” said a Kuala Lumpur-based futures trader.
The January soyoil contract on the Dalian exchange fell 1.62pc, while the Dalian January palm oil contract dropped 2.23pc. Soybean oil on the Chicago Board of Trade fell 0.53pc.
Palm oil stocks were depleting in the last few months but that pace could moderate as exports have started to falter, said a palm oil trader based in Kuala Lumpur.
Malaysia’s palm oil stockpiles at the end of August declined 5.3pc from the previous month to 2.25 million tonnes, industry regulator the Malaysian Palm Oil Board said last week.
But exports of Malaysian palm oil products for Sept 1-15 fell 6.8pc to 700,935 tonnes from 752,470 tonnes shipped during Aug 1-15.
Published in Dawn, September 20th, 2019
