Malaysian palm oil futures slipped to their lowest in over a week on Monday as gains in the local currency made the ringgit-denominated commodity more expensive for overseas buyers and refiners. Malaysias ringgit outperformed regional peers to climb 0.42 percent to 3.3415 on Monday, after the government decided to scrap fuel subsidies, a move seen helping state coffers save some 20 billion ringgit ($6 billion) annually. The ringgit strengthened and added a bit of pressure on palm oil prices, said a trader with a foreign commodities brokerage in Kuala Lumpur. Theres no other strong sentiment, the market should trade in a range of 2,200-2,250 ringgit. The benchmark February contract on the Bursa Malaysia Derivatives Exchange slipped to 2,200 ringgit in intraday trade, its lowest since Nov. 14, before settling 1.3 percent lower at 2,204 ringgit ($658) per tonne by Mondays close. Total traded volume stood at 35,585 lots of 25 tonnes, above the usual 35,000 lots. Market players say prices of palm, which have dropped more than 17 percent so far this year, could be caught in range trading towards end-November and December unless there is a big change in its production or demand scene. Supply of oil palm typically tightens towards the year-end as the rainy monsoon season hampers harvesting and yield growth, but export demand also dwindles as some foreign buyers cut back imports of the tropical oil that clouds in cold temperatures. We have the friendly weather market that is supporting prices, but the problem is exports are not good, the Kuala Lumpur-based trader added. Brent crude oil stabilised around $80 a barrel on Monday as world powers met in Vienna for the final day of talks on Irans nuclear programme ahead of a key meeting of producer group OPEC to discuss production.
Posted on: Tue, 25 Nov 2014 09:59:11 +0000
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