RTRS:VEGOILS-Weaker ringgit currency props up palm oil
* Palm oil has lost nearly 20 percent in 2011
* Exports for Sept. 1-20 fall but has started to bottom out
* Weaker ringgit makes palm oil cheaper to process
(updates prices)
By Niluksi Koswanage
KUALA LUMPUR, Sept 20 (Reuters) - Malaysian palm oil futures
inched up on Tuesday as the weaker ringgit made the
vegetable oil cheaper to process at time when exports could
start rising again ahead of an Indian festival and a national
holiday in China.
Investors were also bargain hunting after commodity prices
declined the previous day on concerns about the euro zone's debt
crisis, boosting safe-havens such as the U.S. dollar.
"The only reason the market is higher is because of the
super-duper weak ringgit, making palm oil look cheap in relative
value," said a trader in Kuala Lumpur.
"But on the flip side, the higher U.S. dollar always results
in pressure on U.S. based commodities and that is every single
vegetable oil product out there," he said.
A stronger dollar makes vegetable oil cargoes priced in that
currency more expensive for overseas buyers although with
India's Diwali festival late next month and China's Golden week
holiday in early October, orders are expected to pour in.
Benchmark December palm oil FCPOc3 on the Bursa Malaysia
Derivatives Exchange settled up 0.9 percent to 3,067
ringgit($985.48) per tonne.
Overall volumes were light, with 16,863 lots of 25 tonnes
changing hands, compared to the usual 25,000 lots.
Reuters analyst Wang Tao forecast prices to remain neutral
in a range of 3,000-3,083 ringgit per tonne.
Palm oil has lost almost 20 percent so far this year on high
stocks and a slowdown in demand.
Malaysia's Sept. 1-20 palm oil exports fell 16.4 percent to
978,087 tonnes from 1,170,226 tonnes shipped during Aug. 1-20,
cargo surveyor Intertek Testing Services said on Tuesday.
That represents a recovery, as exports in the first ten days
of September were down 36.4 percent to 377,038 tonnes from the
same period a month ago.
Another surveyor, Societe Generale de Surveillance, reported
a 17.4 percent fall to 967,859 tonnes in the same period.
Brent crude futures LCOc1 rose $1 to $110.14 a barrel,
recouping from heavy losses as worries over the global economy
were seen factored into current prices.
U.S. soyoil for October delivery rose 0.8 percent on
bargain hunting during Asian hours, while the most active May
2012 soybean oil contract on China's Dalian Exchange
edged up 0.3 percent.
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil in Chinese yuan per tonne
Crude in U.S. dollars per barrel
($1 = 3.112 Ringgit)
(Editing by Miral Fahmy)
((niki.koswanage@thomsonreuters.com)(+603 2333 8035)(Reuters
Messaging:)(niki.koswanage.thomsonreuters.com@thomsonreuters.net
)
