Malaysian palm ends near two-week high on weak ringgit, output cut forecast
26.05.2023 (Hellenic Shipping News) - Malaysian palm oil futures jumped as much as 3% on Thursday, ending near a two-week high, helped by a weak ringgit and forecasts of a El Nino weather pattern hitting production next year.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange closed up 91 ringgit, or 2.67%, to 3,498 ringgit ($788.73) a tonne.
Palm rose for a second consecutive session to its highest closing level since May 15.
Malaysia’s exports during May 1-25 fell 0.7% from the same week in April, cargo surveyor Intertek Testing Services said. Another cargo surveyor, AmSpec Agri Malaysia, said exports rose 0.7%.
Crude palm oil production in the world’s second largest producer could drop between 1 and 3 million tonnes next year due to the El Niño weather pattern, the Malaysian Palm Oil Board (MPOB) said.
Production plunged 20% during the 2016 El Niño event, but it should be less severe this year due to better planting material and improved labour conditions, the regulator’s director-general Ahmad Parveez Ghulam Kadir.
The ringgit fell 0.74% against the dollar to hit its lowest since November 2022, making the commodity cheaper for buyers holding foreign currency.
Dalian’s most-active soyoil contract gained 0.3%, while its palm oil contract rose 0.8%. Soyoil prices on the Chicago Board of Trade were up 0.6%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The world’s two biggest palm oil producers Indonesia and Malaysia will send top officials to the European Union next week to voice concern over a new deforestation law they believe could be detrimental to small farming businesses.
Source: Reuters (Reporting by Mei Mei Chu; Editing by Sonia Cheema, Subhranshu Sahu and Rashmi Aich)