• +923 343206 986
  • Contact@btrams.com
  • Pakistan

Stronger Rival Oils And Weaker Ringgit Once Again Racks-Up Palm Oil Prices

PALM OIL : Supported by stronger rival edible oils on the Dalian exchange and a weaker ringgit, Malaysian palm oil prices posted a second consecutive weekly gain on Friday and reached their highest close in more than six weeks.

On Friday, the benchmark palm oil contract for delivery in May increased by 1.65 percent to 4,136 ringgit ($933.63) per tonne, marking its second session of gains in a row. In early trade, the contract reached its highest level since January 4 at 4,170 ringgit per tonne and gained 5.22 percent for the week.

According to Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group, “Crude palm oil futures opened gap higher for the third straight day following bullish Chicago soy oil futures overnight and Dalian RBD palm olein, soy oil and ZCE rapeseed oil futures in Asian hours today.”

The most active soyoil contract in Dalian went up 2.61 percent, while the palm oil contract went up 3.49 percent. On the Chicago Board of Trade, the price of soy oil was down 1.16 percent.

As they compete for a share of the global market for rival vegetable oils, Palm oil is affected by changes in the prices of related oils.

Bagani stated that the contract was also supported by a higher tax and levy on palm oil exports from February 16 to 28 in Indonesia.

“The increase in Indonesia palm oil export levy and taxes… along with lower palm oil export availability until Ramadan is keeping sellers rigid to lower prices,” he added. Palm oil posts biggest gain in approximately three weeks on stronger rival oils.

The palm’s trade currency, the Malaysian ringgit, fell 0.64 percent on Friday and lost 2.3% for the week. Palm oil is more appealing to holders of foreign currency when the ringgit is weaker.

Data from cargo surveyors Societe Generale de Surveillance and Intertek Testing Services, as well as independent inspection company AmSpec Agri Malaysia, showed earlier this week that exports of Malaysian palm oil products from January 1 to February 15 were between 437,327 and 484,950 tons, compared to 401,749 and 453,771 tons shipped from January 1 to February 15.

A trade group said this week that refiners increased their purchases of soybean and sunflower oils as a result of a narrowing discount to rival oils. As a result, India’s January palm oil imports fell 25% from December to their lowest level in six months.