Palm Oil dips on firmer ringgit but stronger rival oils cap losses

Following a recent surge to its highest closing price in over seven months, Malaysian palm oil futures experienced a slight dip on Thursday. This decline was attributed partly to the strengthening of the ringgit, although competition from other edible oils limited losses. The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange closed at 4,071 ringgit per metric ton, marking a two-day low after a notable increase of 2.38% in the previous session. Tight supply conditions, particularly during the monsoon period, coupled with minor restocking activities across various importers, contributed to the recent price dynamics. However, the appreciation of the ringgit against the U.S. dollar, following the Bank Negara Malaysia’s decision to maintain its benchmark interest rate, dampened the appeal of palm oil for foreign investors. Meanwhile, the performance of related oils such as soyoil on the Dalian Commodity Exchange and the Chicago Board of Trade played a role in influencing palm oil prices, as they compete for market share within the global vegetable oils market. Despite the overall positive outlook, factors like Malaysia’s declining palm oil stocks and India’s reduced imports in February add an element of uncertainty to future market trends.