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VEGOILS-Palm Oil Stretches Gains Into Third Day on Weak Ringgit
calendar24-12-2013 | linkReuters | Share This Post:

24/12/2013 (Reuters) - Malaysian palm oil futures ended higher on Monday, stretching gains into a third straight day as the ringgit's poor performance stoked demand, while concerns over disruption in supply due to monsoon floods also buoyed prices.

The Malaysian ringgit touched a new three-month low on Monday, falling 0.1 percent to trade at 3.2860 versus the U.S dollar. The weaker ringgit makes Malaysian palm cheaper for overseas buyers and refiners, prompting them to book shipments.

Concerns that monsoon floods in key palm-growing states in Malaysia would hamper production also lifted prices of the tropical oil.

Malaysia's Meteorological Department warned that thunderstorms and heavy rains are expected over the states of Johor and Sarawak until Monday afternoon, and potentially cause flash floods in low-lying areas.

"We are affected by the weak ringgit, and the floods which is a prevailing worry," said a trader with a foreign commodities brokerage in Malaysia.

The benchmark March contract on the Bursa Malaysia Derivatives Exchange had inched up 1.2 percent to 2,616 ringgit ($795) per tonne by Monday's close.

Total traded volume stood at 32,019 lots of 25 tonnes,  below the average 35,000 lots.

More than a hundred workers at Indonesia's biggest port Tanjung Priok went on strike late Sunday, but port officials said shipping and port operations were unaffected as of Monday.   

"No service disruptions there," Fadhil Hasan, executive director at the Indonesian Palm Oil Association (GAPKI), told Reuters in a text. "So far, no report about delay or cancellation of shipments."

Tanjung Priok port handles about 50 percent of oil, containers, and dry bulk goods in and out of Indonesia. Global commodity markets were not impacted by the strike for now, traders said. 

Indonesia, the world's biggest palm oil producer, kept its export tax for crude palm oil unchanged at 12 percent for January, while No.2 producer Malaysia has its own tax unchanged at 5 percent.    

In other markets, Brent crude hit a two-week high near $112 a barrel on Monday as internal strife in South Sudan threatened the country's oil output, adding to supply woes in Africa.

In other competing vegetable oil markets, the U.S. soyoil contract for January was flat in late Asian trade. The most active May soybean oil contract on the Dalian Commodities Exchange edged up 0.1 percent.

  Palm, soy and crude oil prices at 1004 GMT

  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      JAN4    2593   +47.00    2534    2595     338
  MY PALM OIL      FEB4    2607   +36.00    2563    2610    4457
  MY PALM OIL      MAR4    2616   +32.00    2573    2622   18087
  CHINA PALM OLEIN MAY4    6056    -4.00    5974    6080  926502
  CHINA SOYOIL     MAY4    6982    +4.00    6926    7008  757250
  CBOT SOY OIL     MAR4   39.74    +0.00   39.55   39.89    3449
  NYMEX CRUDE      FEB4   99.01    -0.31   98.86   99.31    7531

  Palm oil prices in Malaysian ringgit per tonne
  CBOT soy oil in U.S. cents per pound
  Dalian soy oil and RBD palm olein in Chinese yuan per tonne
  Crude in U.S. dollars per barrel
  ($1 = 3.29 Malaysian ringgit)