VEGOILS-Palm oil gains as ringgit hits 5½-year low

Band Mei Mei Chu

KUALA LUMPUR, August 16 (Reuters) – Malaysian palm oil futures ended higher on Tuesday as the ringgit hit a five-and-a-half-year low, making vegetable oil cheaper for buyers holding other currencies.

The reference palm oil contract FCPOc3 for November delivery on the Bursa Malaysia Derivatives Exchange rose 45 ringgits, or 1.09%, to 4,183 ringgits ($937.05) per tonne.

Prices fell 6.4% on Monday, the most in a month, on lackluster mid-August export data and lower crude oil prices.

A growing discount between crude palm oil and soybean oil, now at around $520 a ton, and a weakening ringgit have boosted demand, Refinitiv Commodities Research said in a note late Monday.

The ringgit MYR= fell 0.16% against the dollar to its lowest level since January 2017. The currency has weakened around 7% so far this year.

The market was also supported by shorting and technical buying after prices managed to stay above 4,100 ringgits, a Kuala Lumpur-based trader said.

Exports of Malaysian palm oil products from August 1-15 fell 9.5% to 516,072 tonnes from the same period in July, the General Surveillance Society cargo inspector said. .

Dalian’s most active soybean oil contract DBYcv1 fell 1.2%, while its palm oil contract DCPcv1 lost 1.1%. Chicago Board of Trade Soybean Oil Price BOcv1 were down 1.2%.

Palm oil is affected by fluctuations in related oil prices as they compete for a share of the global vegetable oil market.

($1 = 4.4640 ringgit)

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(Reporting by Mei Mei Chu; Editing by Rashmi Aich and Subhranshu Sahu)

((Meifong.chu@thomsonreuters.com))

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