The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was up 0.4% at 2, 102 ringgit ($502) per tonne at the close of trade, after briefly hitting 2, 108 ringgit, its strongest level since May 29.KUALA LUMPUR: Malaysian palm oil futures reversed early losses to close higher on Tuesday, hitting a fresh two-month high on the back of a weaker ringgit and expectations of lower August production.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was up 0.4% at 2, 102 ringgit ($502) per tonne at the close of trade, after briefly hitting 2, 108 ringgit, its strongest level since May 29.

“The market is supported by the weaker ringgit and lower production data, ” said a futures trader in Kuala Lumpur, after data from a Malaysian millers’ association showed falling output in early August versus the previous month.

The ringgit, currently trading at around two-month lows, further declined on Tuesday afternoon, and was last down 0.3% against the dollar at 4.1900. Weakness in the ringgit, palm’s currency of trade, usually supports the edible oil by making it cheaper for foreign buyers. In other related oils, U.S. soyoil futures on the CBOT were last up 0.7%, while the September soyoil contract on the Dalian exchange rose 1.5%.

The Dalian September palm oil contract gained 1%. Palm oil prices are affected by movements in related oils that compete in the global vegetable oils market. 

Source : The Star