Palm futures decline on stronger ringgit

FE Team | Published: September 30, 2024 23:52:24

KUALA LUMPUR, Sept 30 (Reuters): Malaysian palm oil futures ended the month with overall gains, but declined on Monday, marking the second consecutive session of losses as a stronger ringgit weighed on sentiment and traders remained cautious as palm continues to be priced at a premium against rival oils.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was down 53 ringgit, or 1.31%, to 3,998 ringgit ($970.15) a metric ton at the closing.
The contract lost 3.71% in the last two sessions but still gained 0.53% in September.
Palm prices are currently too high compared to rival oils, and they need to get closer to rivals for the palm to compete for demand in the market, Paramalingam Supramaniam, a director at Selangor-based brokerage Pelindung Bestari, said.
"Palm prices are getting expensive, and many are not rushing to buy, but (investors) would rather wait for better prices since rival oils are also undergoing price corrections," he said.
However, a strongerringgit coupled with the upcoming closure of the Dalian Commodity Exchange (DCE) for the holidays is pushing prices down.
The DCE will be closed for China's Golden Week holiday from October 1 to 7.
The ringgit, palm's currency of trade, strengthened 0.02% against the US dollar, making the commodity more expensive for buyers holding foreign currencies.