CPO price drops more than 1% on strong ringgit
26/01/2018 (The Star Online) - KUALA LUMPUR: Malaysian palm oil futures fell by more than 1 percent in evening trade on Thursday as a stronger ringgit helped to halt a three-session run of gains.
The ringgit, palm's currency of trade, has risen steadily since the start of the year and was up 0.7 percent on Thursday at 3.8840 against the dollar.
A stronger ringgit makes palm oil more expensive for holders of foreign currencies.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was down 1.1 percent at 2,493 ringgit ($641.86) a tonne by the close of trade.
Trading volumes stood at 38,043 lots of 25 tonnes each at the end of the trading day.
"The ringgit appreciated sharply this evening," a Kuala Lumpur-based trader said, explaining that it led to a sharper decline in palm oil prices.
The ringgit strengthened after Malaysia's central bank raised key interest rates for the first time in 3-1/2 years, by 25 basis points to 3.25 percent. The move came as inflation creeps upwards amid robust economic growth.
Meanwhile, exports of palm oil products from Malaysia fell 7 percent in the Jan. 1-25 period compared with the corresponding period last month, according to data from cargo surveyor Intertek Testing Services on Thursday.
Another cargo surveyor, Societe Generale de Surveillance, reported a 6.8 percent decline in the same period.
In related edible oils, the March soybean oil contract on the Chicago Board of Trade rose 0.1 percent, while May soybean oil on the Dalian Commodity Exchange dipped by 0.1 percent.
The Dalian May palm oil contract edged down by 0.04 percent. - Reuters