KUALA LUMPUR: Malaysian palm oil futures retreated after touching a 19-month high earlier on Thursday, as the ringgit gained and as panic buying emerged due to an expected supply shortage died down.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange closed 0.4 per cent lower at 2,485 ringgit ($595) per tonne, ending a six-session rally.

The firm ringgit coupled with the view that the contract had been overbought triggered the downturn in late trade, a Kuala Lumpur-based trader told Reuters.

The ringgit rose as high as 0.2pc against the dollar on Thursday, making the edible oil more expensive for holders of foreign currencies. This comes after palm saw its biggest weekly jump in nearly three years as rival oils clocked record highs.

Prices rallied over the past week on expectations that consumption will surge thanks to Indonesia and Malaysia’s push for biofuel, as well as rumours of declining supply.

Published in Dawn, November 1st, 2019