Palm oil gains nearly 4% on weak ringgit, commodities rebound
25.10.2022 () - Malaysian palm oil futures rose on Tuesday to their highest in nearly nine weeks, supported by weak currency and stronger rival vegetable oils and crude oil as traders awaited export shipments data for so far in October.
The benchmark palm oil contract FCPOc3 for January delivery on the Bursa Malaysia Derivatives Exchange rose 152 ringgit, or 3.71%, to 4,253 ringgit ($897.45) a tonne by midday.
In trade resuming after a long weekend, palm oil futures were lifted by a “weak ringgit and other commodities market rebound,” a trader based in Kuala Lumpur said.
The ringgit MYR=, palm’s currency of trade, fell 0.04% against the dollar to its lowest since 1998, making the commodity cheaper for holders of foreign currency.
The contract edged higher on Friday to post a 7% rise for the week, as the arrival of the monsoon season stoked production worries in the world’s second-largest palm producer.
Dalian’s most active soyoil contract DBYcv1 lost 0.10%, while its palm oil contract DCPcv1 increased 1.9%. Soyoil prices on the Chicago Board of Trade BOc1 were up 0.49%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices rose on Tuesday as the U.S. dollar eased against major peers, but gains were limited by worries of slowing global fuel demand growth amid bearish economic data from key oil importing economies such as China.
Palm oil FCPOc3 still targets a range of 3,958-4,001 ringgit per tonne, as it remains below a resistance at 4,194 ringgit.
Source: Reuters (Reporting by Bernadette Christina; Editing by Savio D’Souza and Shailesh Kuber)