Firmer US Dollar Weighs On Palm Oil Futures

KUALA LUMPUR: Malaysian crude palm oil futures slipped yesterday, extending losses for a second day, as a firmer U.S. dollar weighed.

But the pace of the decline was muted compared to the previous day due to expectations of stock drawdown this month as exports were still resilient, despite falling about 7 percent for the first 20 days of December.

“Even though exports are slightly weak, there should be a decline of up to 250,000 tonnes in stocks because of demand and poor production,” a trader with a foreign commodities broker said.

A stock reduction of 250,000 tonnes represents a 13 percent decline to 1.68 million tonnes in December from a month ago, signalling the end of the high production season.

The benchmark March contract on the Bursa Malaysia Derivatives Exchange fell RM16 to RM2,539 by the midday break in light trading.

“The market is quiet but there are some who are making moves based on the U.S. dollar,” the trader said.

The Malaysian ringgit slipped against the greenback, trading at RM3.435. A firmer U.S. dollar makes exports of the vegetable oil priced in that currency more expensive for overseas buyers.

Other vegetable oil markets were mixed. U.S. soyoil for January delivery rose 0.6 percent along with much of the soybean complex. Source: Business Times


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