MARKET DEVELOPMENT
Palm Oil Advances to Two-Week High as Ringgit Drop Boosts Demand
Palm Oil Advances to Two-Week High as Ringgit Drop Boosts Demand
20/01/2014 (Bloomberg) - Palm oil climbed to the highest level in almost two weeks on speculation that a weakening Malaysian currency will boost demand for ringgit-denominated futures and stem a decline in exports.
The contract for April delivery advanced 1.5 percent to 2,577 ringgit ($778) a metric ton on the Bursa Malaysia Derivatives by the midday break, the highest price for most active futures since Jan. 7. The gain pared losses to 3.1 percent this year.
Exports from Malaysia fell 15 percent to 748,303 tons in the first 20 days of January from the same period a month earlier, Intertek, a surveyor, said today. That was less than the 28 percent decline in the first half of this month, Intertek data showed. Shipments to China gained 8.1 percent this month, according to Intertek. The nation celebrates the Lunar New Year festival from Jan. 31.
“The ringgit is likely to further weaken against the U.S. dollar and this will actually boost demand for ringgit-denominated palm oil,” said Tan Chee Tat, an analyst with Phillip Futures Pte in Singapore. “Chinese New Year is at the end of the month and this is likely to boost some of the export demand for palm oil.”
The Malaysian currency fell to a four-month low as data in China, the nation’s biggest overseas market, trailed estimates and a recovery in the U.S. bolstered the case for the Federal Reserve to trim stimulus. The ringgit dropped to 3.314 against the U.S. dollar today, the weakest level since Sept. 11, and was the biggest loser among Asia’s 11 most-traded currencies.
Soybean oil for March delivery declined 0.8 percent to 37.74 cents a pound on the Chicago Board of Trade on Jan. 17, while soybeans ended little changed at $13.165 a bushel. Financial markets in the U.S. are closed today for a public holiday.
Refined palm oil for May delivery rose 1.1 percent to 5,890 yuan ($973) a ton on the Dalian Commodity Exchange. Soybean oil climbed 1 percent to 6,676 yuan.
The contract for April delivery advanced 1.5 percent to 2,577 ringgit ($778) a metric ton on the Bursa Malaysia Derivatives by the midday break, the highest price for most active futures since Jan. 7. The gain pared losses to 3.1 percent this year.
Exports from Malaysia fell 15 percent to 748,303 tons in the first 20 days of January from the same period a month earlier, Intertek, a surveyor, said today. That was less than the 28 percent decline in the first half of this month, Intertek data showed. Shipments to China gained 8.1 percent this month, according to Intertek. The nation celebrates the Lunar New Year festival from Jan. 31.
“The ringgit is likely to further weaken against the U.S. dollar and this will actually boost demand for ringgit-denominated palm oil,” said Tan Chee Tat, an analyst with Phillip Futures Pte in Singapore. “Chinese New Year is at the end of the month and this is likely to boost some of the export demand for palm oil.”
The Malaysian currency fell to a four-month low as data in China, the nation’s biggest overseas market, trailed estimates and a recovery in the U.S. bolstered the case for the Federal Reserve to trim stimulus. The ringgit dropped to 3.314 against the U.S. dollar today, the weakest level since Sept. 11, and was the biggest loser among Asia’s 11 most-traded currencies.
Soybean oil for March delivery declined 0.8 percent to 37.74 cents a pound on the Chicago Board of Trade on Jan. 17, while soybeans ended little changed at $13.165 a bushel. Financial markets in the U.S. are closed today for a public holiday.
Refined palm oil for May delivery rose 1.1 percent to 5,890 yuan ($973) a ton on the Dalian Commodity Exchange. Soybean oil climbed 1 percent to 6,676 yuan.