Business Recorder
KUALA LUMPUR: Malaysian palm oil futures bounced back from early losses on Monday, supported by tensions in the Middle East and fears of weather-related supply disruptions, although demand concerns and a stronger ringgit capped the gains. The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange rose 34 ringgit, or 0.74%, to 4,604 ringgit ($1,164.69) a metric ton by the midday break. The contract fell as much as 0.42% earlier in the session. The Middle East conflict, along with the threat of El Nino and any adverse weather conditions that could disrupt output, is providing support to prices, said Sandeep Singh, director of The Farm Trade, a Kuala Lumpur-based consulting and trading company. However, a lack of demand due to economic uncertainties poses a risk, as does any reduction in biodiesel usage, he said, adding that, “the strengthening ringgit is also weighing on prices.” Cargo surveyors estimated that exports of Malaysian palm oil products for April fell between 15.3% and 16.2% from a month earlier. Soyoil prices on the Chicago Board of Trade were up 0.07%. The Dalian Commodity Exchange was closed for a holiday and will resume trading on May 6. Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Oil prices eased after President Donald Trump said the United States would begin an effort to assist ships stranded in the Strait of Hormuz, but the lack of a US-Iran peace deal kept the market supported above $100. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, strengthened 0.3% against the dollar, making the commodity more expensive for buyers holding foreign currencies. Indonesia exported 5.85 million tons of crude and refined palm oil in the March quarter, up 9.30% from a year earlier, statistics bureau data showed.
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