(For physical price assessments, see MPOI1.)
Sept. 19 (Bloomberg) -- Palm oil fell to the lowest level in almost five weeks after the U.S. Federal Reserve refrained from cutting stimulus, spurring a rally in the Malaysian currency that lowered the appeal of ringgit-denominated futures.
The contract for delivery in December declined 0.2 percent to 2,318 ringgit ($736) a metric ton on the Bursa Malaysia Derivatives, the lowest price at close for the most-active contract since Aug. 16. Palm oil for physical delivery in October was at 2,340 ringgit, data compiled by Bloomberg show.
The Federal Reserve Open Market Committee said it wants to see more evidence of a recovery in the world’s largest economy before adjusting the pace of its $85 billion in monthly purchases of Treasury and mortgage debt. The Malaysian ringgit surged the most since 1998 after the decision.
“There is uncertainty in demand” with the volatility in currencies, said Donny Khor, deputy director of futures and commodities at RHB Investment Bank Bhd. in Kuala Lumpur. “Exports will be more expensive. In the coming month, production will be huge, and that has been more or less factored into the market.”
Output climbed to 1.74 million tons in August, the highest level since December, according to data from the Malaysian Palm Oil Board. Production is typically highest between July and October each year.
Exports from Indonesia, the largest producer, fell to 1.48 million tons in August from 1.59 million tons a month earlier, the country’s palm oil association said today. Estimates were for 1.58 million tons, a Bloomberg survey showed.
Soybeans for November gained 0.8 percent to $13.5875 a bushel on the Chicago Board of Trade. Soybean oil for December delivery climbed 0.4 percent to 42.87 cents a pound. Financial markets in China are closed for a public holiday.
--Editor: Thomas Kutty Abraham