Malaysian palm oil futures fell nearly 2 percent on Friday, snapping a three-day winning streak, amid a stronger ringgit and slow demand. But the vegetable oil still posted a second weekly gain, having touched a two-week high in the prior session, largely helped by the weakness in the Malaysian currency prior to Friday’s recovery.
Palm oil for January delivery on the Bursa Malaysia Derivatives Exchange was down 1.9 percent at 2,326 ringgit ($550.92) per tonne on Friday’s session, but was still up 3 percent for the week. Traded volume stood at 35,389 lots of 25 tonnes each, roughly in line with the average 35,000 lots usually traded in a day. The Malaysian ringgit rose on Friday along with the Indonesian rupiah as global risky assets rallied after the European Central Bank opened the door for more stimulus as early as December.
A firmer ringgit makes Malaysian palm oil more costly for buyers using other currencies. “As palm tapers down you’ll see some buying interest coming in. But at the same time the ringgit is not helping,” said a trader in Kuala Lumpur. Malaysia’s Prime Minister Najib Razak presented the government’s 2016 budget on Friday that will look to shore up economic growth and appease voters unhappy with his leadership and rising living costs. In other vegetable oil markets, US December soyoil was up 0.1 percent in late Asian trading and January soybean oil on the Dalian Commodity Exchange fell 0.4 percent.