05.12.2019 (Business Recorder) - Malaysian palm oil futures extended gains into a second session on Wednesday despite some profit taking, as a weaker ringgit supported prices.

The benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange closed to trade at 0.9% higher to 2,771 ringgit ($664.51) a tonne.

Palm prices have risen steeply over the past two months to trade at two-year highs, boosted by a push to increase the use of palm oil in biodiesel in Malaysia and Indonesia and expectations of a supply shortage.

“Prices opened higher but came off on profit-taking early in the session," a Kuala Lumpur-based trader told Reuters. Firm spot cash prices helped push futures higher later in the session, he added.

A second Kuala Lumpur-based trader said the gains were driven by “supportive external markets led by the Dalian Commodities Exchange and a weak ringgit". A weaker ringgit, palm's currency of trade, usually makes the edible oil cheaper for foreign buyers. The ringgit was down 0.1% against the dollar, after falling 0.2% in the previous session. Dalian's January soyaoil contract traded 0.6% higher, while its palm oil contract jumped 1.7%. Soyaoil prices on the Chicago Board of Trade were 0.3% higher. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.