Malaysia: Palm Oil Prices Edge Up On Weak Ringgit, Lower Output Forecast

Palm oil rebounded from a one-week low, supported by a weaker Malaysian ringgit and expectations of lower production in the second-largest producer in September.

“Output trend in Malaysia has been lower this month,” said Abdul Hameed, director of sales at Manzoor Trading Co. in Lahore. He added that the further fall in the ringgit attracted bargain buying, with traders covering October demand.

However, gains in palm oil may be limited as festival buying in India, the world’s largest edible oil importer, is largely over, according to Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental.

Malaysian palm oil exports rose 2.6% between September 1-15 compared with the previous month, according to Intertek Testing Services, while AmSpec Agri data showed exports were largely unchanged.

On the markets, palm oil for December delivery on Bursa Malaysia Derivatives rose as much as 0.6% to 4,463 ringgit per tonne before trading at 4,447 ringgit at the midday break. Soybean oil for December in Chicago gained 0.1% to 51.17 US cents per pound, while refined palm oil for January on the Dalian Commodity Exchange rose 0.5% to 9,352 yuan per tonne. Soybean oil for January increased 0.8% to 8,352 yuan per tonne.

Bloomberg data showed soybean oil’s premium over palm at around US$70 per tonne, above the one-year average of US$43, while palm’s premium over gasoil stood at US$359 per tonne, compared with a year-average of US$323.

Tags: exports, soybean oil, India, Malaysia, palm oil, gains, gasoil