firmer soyoil markets although the surging ringgit currency nipped
gains.
Palm oil, which lost 4 per cent in the first quarter of
2010, is making little headway as the ringgit reached multi-month highs
at the start of the second quarter.
“It’s a war out there.
Plantation firms are taking up positions because a stronger ringgit
means better returns for their crude palm oil sales to refiners,” said a
trader with a foreign commodities broker.
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“Refiners are losing their margins because the crude palm oil raw
material is too expensive. The dollar is weaker as well, so they are
staying away or closing positions,”the trader added.
The
benchmark June crude palm oil contract on Bursa Malaysia Derivatives
Exchange rose RM19, or 0.8 per cent, to settle at RM2,539.
Traded
volume stood at 12,606 lots of 25 tonnes each, up from the usual 10,000
lots.
The ringgit extended its rally to a 23-month high of
3.1930 per dollar, eating into refiners’ margins as crude palm oil
feedstock for refined products is priced in the Malaysian currency.
The
market is also watching for cues from Malaysia’s palm oil exports,
production and stocks due to be released over the weekend and on Monday.
Reuters
will issue a poll for March palm oil stocks, production and exports
today.
Vegetable oil traders were also tracking developments from
a brewing trade dispute between China and Argentina.
A China
Ministry of Commerce source has refuted claims it was curbing soybean
oil shipments from Argentina, saying new quality standards were for
consumer safety, the China Daily reported on today.
Traders and
analysts say the subtext for the dispute is that China wants to winnow
down its record edible oil stockpiles and bolster its struggling oilseed
processors.
Oil slipped back from 18-month highs around US$87
yesterday, taking a breath after two weeks of gains. US soyoil futures still
held up although gains were limited.
Source : Business Times
