Palm oil slumps as Malaysian ringgit surges
Malaysian palm oil futures fell on Thursday, snapping a three-day rally, as the ringgit posted its biggest surge in over six years over an end to a political deadlock, triggering some profit-taking.
The benchmark palm oil contract FCPOc3 for February delivery on the Bursa Malaysia Derivatives Exchange lost 1.44% to end the afternoon trade at 4,046 ringgit ($901.11) per tonne, erasing some of the 6.74% gain over the previous three sessions.
It rose as much as 2.80% earlier in the day, hitting its highest in nearly two weeks due to firm exports and anticipation of lower production.
“Prices closed lower as Malaysian ringgit strengthened following appointment of Anwar (Ibrahim) as the tenth prime minister,” a trader in Kuala Lumpur said. “Market expecting further strength in the ringgit for the coming days.”
The ringgit MYR= jumped by 1.79% on Thursday, the biggest one-day gain since March 2016.
The stronger ringgit, which the contract is traded in, would make palm oil less attractive for holders of foreign currencies.
Anwar Ibrahim was sworn in as prime minister on Thursday, ending five days of unprecedented post-election crisis.
Meanwhile, Dalian’s most-active soyoil contract DBYv1 gained 1.72%, while its palm oil contract DCPv1 rose 2.69%. The Chicago Board of Trade is closed for the Thanksgiving holiday.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Source: Reuters (Reporting by Bernadette Christina, Fransiska Nangoy; Editing by Janane Venkatraman, Uttaresh.V and Maju Samuel)