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Malaysian palm oil price fell over 2% on stronger ringgit

KUALA LUMPUR: Malaysian palm oil price fell on Monday, weighed by a strengthening ringgit and weakness in competing vegetable oils.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange slid 93 ringgit, or 2.17%, to 4,194 ringgit ($914.72) a tonne in early trading.

Earlier, Malaysian palm oil futures climbed on Friday, supported by a surge in early November exports and Indonesia plan to raise its export tax reference price, even as the contract fell for the week.

After declining for three straight sessions, the benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 112 ringgit, or 2.68%, to 4,290 ringgit ($927.57) a tonne.

For the week, palm oil price slipped by 1.76%.

In top palm oil producer Indonesia , Trade Ministry official Farid Amir said Jakarta plans to set the reference price of its crude palm oil higher at $826.58 per tonne for Nov. 16-30 shipments.

“Higher Indonesian tax and levy is set to diminish Indonesia’s price discount. This will help Malaysian prices to rise,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.

Nine Indonesian companies on Friday signed contracts to sell 2.5 million tonnes of palm oil products valued at $2.6 billion to 13 Chinese buyers, the Indonesian trade ministry said.

Palm has also made a stunning recovery and recouped some losses from the last three days, helped by bullish equities market, Varqa added.