reports of higher production last month weighed on sentiment.
Profit-taking across many commodities also pressured palm oil, which
lost 5 per cent in the first quarter of 2010 because of expectations
for a bumper soy crop and the growing strength of the ringgit against
the US dollar.
“The ringgit is going great guns and we have market players either
staying away or unwinding positions,” said a trader with a local
commodities brokerage.
The benchmark June crude palm oil contract on the Bursa Malaysia
Derivatives Exchange ended down 0.4 per cent at RM 2,520 after dropping
to as low as RM2,498, a level unseen since February 5. Traded volume
surged to 18,000 lots of 25 tonnes each from the usual 10,000 lots.
The ringgit rose 0.6 per cent to 3.210 per dollar, eating into
refiner margins as crude palm oil feedstock for refined products is
priced in the Malaysian currency.
Another trader said a report by a palm oil industry group in the
key producing state of Johor showed regional output rose 18 per cent in
March as oil palms recovered from yield stress and drier weather gave
way to rains.
Southern Johor state accounts for a fifth of Malaysia’s total
production.
Vegetable oil markets are watching a brewing trade dispute between
China and Argentina. Argentina’s government urged China on Monday to
suspend a measure affecting imports of Argentine soybean oil in a trade
spat that threatens a key hard currency earner for the South American
nation.
Source : Business Times
