Palm Oil Climbs in Malaysia for Third Day as Ringgit Drops

Dec 23, 2013 5:55 am ET

Dec. 23 (Bloomberg) -- Palm oil advanced for a third day to the highest level since Dec. 11 as a decline in the Malaysian currency improved prospects for exports from the world’s second- largest producer.

The contract for March delivery gained 1.3 percent to 2,617 ringgit ($795) a metric ton on the Bursa Malaysia Derivatives, the biggest gain since Dec. 4. Futures rose 0.9 percent last week, the most since the five days ended Nov. 22.

The ringgit posted a ninth straight weekly drop last week, its longest run of losses in eight years, on speculation inflows will slow as the U.S. Federal Reserve begins curbing stimulus. Shipments from Malaysia fell 12 percent to 883,575 tons in the first 20 days of December from a month earlier, surveyor Intertek said Dec. 20. That was less than the 20 percent drop in the first 10 days of the month, data showed.

“A weaker ringgit makes palm oil more attractive,” for importers, Arhnue Tan, an analyst at Alliance Investment Bank Bhd., said by phone in Kuala Lumpur. Production in Malaysia may total 1.75 million tons to 1.8 million tons this month, down from 1.86 million tons in November, she said.

Indonesia, the largest producer, will keep its export tax unchanged at 12 percent in January while raising the base price for crude oil to $856.46 a ton, Faiz Achmad, director of food at the Industry Ministry, said in a text message today.

Soybean oil for March delivery was unchanged at 39.74 cents a pound on the Chicago Board of Trade. Soybeans rose 0.4 percent to $13.36 a bushel.

Refined palm oil for May delivery rose 0.2 percent to 6,056 yuan ($997) a ton on the Dalian Commodity Exchange. Soybean oil climbed 0.3 percent to 6,982 yuan.

--Editors: Ovais Subhani, James Poole