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Palm oil falls due to rival oil's weakness; soft ringgit caps losses

Palm oil falls due to rival oil's weakness; soft ringgit caps losses

Malaysian palm oils futures fell for the second session in a row on Monday, to their lowest levels in almost two months. Pressured by weakness in vegetable oils rivals, a weaker currency helped limit losses.

The benchmark June palm oil contract on Bursa Derivatives Exchange fell 1.6% at the closing to 4,305 Ringgit ($971.78) per metric ton, its lowest price since January 31.

The contract follows weak external markets, but the ringgit’s weakness cushioned certain losses," said Kuala Lumpur based trader.

Dalian's palm oil contract, which is the most active contract, fell 1.1% while soyoil prices dropped by 1.02%. The Chicago Board of Trade's (CBOT) soyoil price barely changed, rising 0.02%.

As palm oil competes to gain a share in the global vegetable oil market, it tracks the prices of competing edible oils.

The Malaysian Ringgit, which is the currency of the contract, has weakened by 0.25% in relation to the U.S. Dollar. Palm is more attractive for foreign currency holders with a soft ringgit.

According to cargo surveyors, the exports of Malaysian products containing palm oil between March 1-20 dropped from 5% to 14.2% on a monthly basis. ($1 = 4.4300 ringgit)

(source: Reuters)