Palm Oil Declines as Ringgit, Falling Crude Oil Weaken DemandSwansy Afonso
Palm oil fell for the third time in four days as the Malaysian currency strengthened, lowering the appeal of ringgit-denominated futures, and a decline in crude oil prices dimmed prospects of the vegetable oil as biofuel.
Palm for November delivery retreated 0.5 percent to 2,417 ringgit ($735) a metric ton on the Bursa Malaysia Derivatives. Palm for physical delivery in September was at 2,440 ringgit today, data compiled by Bloomberg show.
The ringgit rose to the highest level since Aug. 15 in intraday trade after the government increased fuel prices and pledged further subsidy cuts to help end 15 years of fiscal deficits. West Texas Intermediate fell a third day after President Barack Obama said he’ll seek approval from U.S. Congress before taking military action in Syria, easing concern that an imminent strike may disrupt Middle East oil exports.
“The ringgit has stopped weakening and slowed the momentum in palm oil prices,” said Han Qiang Sim, an analyst at Phillip Futures Pte. in Singapore. “When prices of crude oil start tapering off, it also causes weakness in palm, which is used to make the substitute biodiesel.”
Soybeans for November delivery jumped 3.4 percent to $14.0325 a bushel on the Chicago Board of Trade. Soybean oil for delivery in December gained 0.8 percent to 44.65 cents a pound.
Refined palm oil for January delivery slid 0.5 percent to close at 5,624 yuan ($919) a ton on the Dalian Commodity Exchange. Soybean oil ended unchanged at 7,288 yuan a ton.