Palm Oil Heads for Second Weekly Decline as Ringgit Strengthens
Palm oil fell, set for a second weekly drop, as the Malaysian currency gained against the dollar, reducing the appeal of ringgit-denominated futures.
The contract for delivery in June dropped as much as 1.7 percent to 2,351 ringgit ($768) a metric ton on the Malaysia Derivatives Exchange, before trading at 2,362 ringgit at the midday break in Kuala Lumpur. Futures are heading for a 0.7 percent loss this week after a 4.6 percent decline in the previous five sessions.
Malaysia’s ringgit was headed for its biggest weekly gain since September after Prime Minister Najib Razak dissolved parliament on April 3, paving the way for polls to be held in the coming weeks. The currency, which reached a seven-month low of 3.1395 on March 18, has rallied 1.1 percent this month to 3.0613 a dollar.
“The ringgit is getting stronger and pressuring prices lower,” Chandran Sinnasamy, head of trading at LT International Futures Sdn., said by phone from Kuala Lumpur. The losses in soybeans are also weakened prices, he said.
The oilseed, which can be crushed to make soybean oil, traded near its lowest close in three months as the death toll from a new strain of bird flu in China rose, increasing concerns poultry meat consumption and feed use in the world’s largest buyer of soybeans may slow. Beans for delivery in May declined 0.6 percent to $13.6425 a bushel. Futures closed at $13.72 yesterday, the lowest since January 4.
Soybean oil for May delivery was little changed at 48.58 cents a pound on the Chicago Board of Trade, heading for a 3.1 percent weekly loss.
To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at firstname.lastname@example.org
To contact the editor responsible for this story: James Poole at email@example.com