KUALA LUMPUR (Reuters) - Malaysian palm oil futures rose on the back of a weaker ringgit in its early session on Wednesday, but pared gains in the second half of trade as strength in related edible oils eased.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was up 0.04 percent at 2,363 ringgit ($600.81) a tonne at the close of trade, its first gain in seven days.
Trading volumes stood at 30,072 lots of 25 tonnes each on Wednesday evening.
“External markets have come off their highs, and a lack of follow through buying led to some profit taking,” said a futures trader in Kuala Lumpur.
“However, the weak ringgit capped palm’s downside.”
Weakness in the ringgit, palm’s currency of trade, typically supports palm by making it cheaper for holders of foreign currencies, propping up demand.
The ringgit weakened on Wednesday to its lowest level against the dollar since Feb. 14, and was last down 0.3 percent at 3.9330. It has steadily declined over the past month, and has lost 1.8 percent of its value since the start of April.
Palm had fallen to a two-week low in its previous session, and was down 1.3 percent last week as traders turned bearish over weak export demand. [POI/]
Malaysian palm oil product exports fell 5.7 percent for the full month of April versus March, inspection company AmSpec Agri Malaysia reported. Meanwhile, cargo surveyor Societe Generale de Surveillance showed a 4.5 percent decline for the same time period as Indian demand weakened.
In other related oils, the Chicago July soybean oil contract rose 0.4 percent, while September soybean oil on China’s Dalian Commodity Exchange was also up 0.4 percent.
The Dalian September palm oil contract edged up 0.04 percent.
Palm oil is impacted by movements in rival edible oils as they compete for a share in the global vegetable oils market.
Reporting by Emily Chow; Editing by Sunil Nair/David Evans