Palm Oil Futures Decline on Firmer Ringgit, Weak Demand

KUALA LUMPUR: Malaysian palm oil futures experienced a reversal of fortune on Friday, relinquishing earlier gains due to the impact of a stronger ringgit and reduced demand from significant markets, culminating in a weekly loss.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange decreased by 0.79%, settling at 3,880 ringgit ($911.23) per metric ton at market close.

The contract’s value diminished by 4.36% over the course of the week.

Anilkumar Bagani, the head of commodity research at Sunvin Group, a brokerage located in Mumbai, noted that the rise in the ringgit’s value, coupled with a lack of strong purchasing activity amid expectations of increased Malaysian palm oil inventories for April, served to curtail gains.

Soyoil prices on the Chicago Board of Trade saw a decrease of 0.72%. The Dalian Commodity Exchange remained closed from May 1 to May 5 in observance of the Labour Day holidays.

Palm oil’s pricing is influenced by the movements of competing edible oils, as they vie for dominance in the global vegetable oils market.

Palm Prices Hit 7-Month Low

Palm prices concluded at their lowest point in seven months as increased production and stock levels applied downward pressure.

Oil prices also declined as traders adjusted their positions prior to an OPEC+ meeting and amid some uncertainty regarding a possible de-escalation of the trade tensions between China and the United States.

Lower crude oil futures make palm oil a less appealing alternative for biodiesel feedstock.

The ringgit, which is the currency used for palm oil transactions, appreciated by 1.25% against the U.S. dollar in Friday trading as of 1055 GMT, making the commodity more expensive for international buyers.