KUALA LUMPUR, May 15 (Reuters): Malaysian benchmark crude palm oil futures surged to their highest in a month at the opening of trade on Monday, the first session since the stunning election defeat of a coalition that ruled the country for six decades.
Veteran politician Mahathir Mohamad came out of retirement to lead the opposition to victory over a ruling party he had once led, defeating prime minister Najib Razak, a former protege he had accused of corruption.
Palm oil prices rose as much as nearly 3.0 per cent on Monday morning, reaching their strongest since April 10 at 2,452 ringgit ($615.46) a tonne. They were last up 2.3 per cent at 2,435 ringgit.
Traders said palm prices were supported by declines in the ringgit, its currency of trade, which weakened nearly 1 per cent to a four-month low on Monday.
A weaker ringgit lends support to palm oil prices, as it makes the tropical oil cheaper for holders of foreign currencies.
"The market opened higher on the ringgit's weakness," said a futures trader based in Kuala Lumpur, but added that he did not see the gains lasting as he expected the ringgit to eventually strengthen. He declined to be identified as he was not authorised to speak with media.
"Palm is also supported on lower than estimated end-stocks announced by the Malaysian Palm Oil Board (MPOB)." Stockpiles in Malaysia, the world's second largest palm oil producer, fell to a seven-month low at end the end of April at 2.17 million tonnes, lower than market expectation, industry regulator MPOB said on Thursday.
The national stock exchange Bursa Malaysia was closed for polling day last Wednesday, and on Thursday and Friday in conjunction with special public holidays announced after the results were released.
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