Along With Ringgit Surge, Competing Vegetable Oils Costs Dive the Palm Oil Prices
- 02-Dec-2022 5:38 PM
- Journalist: Motoki Sasaki
Kuala Lumpur (Malaysia): Palm Oil's price is decreased in Malaysia's domestic market, backed by the halting three days in a row of gains, hampered by higher ringgit and lower rival vegetable oils prices. The Malaysian market is emulating the Chicago Board of Trade. The merchant said that the price of soy oil is leading as well as the weaker Dalian Palm Oil pricing and that strengthening the ringgit would further deter Palm Oil exports.
Malaysian Palm Oil shipments jumped between 2% and 6% in November compared to the previous month, according to data from cargo surveyors Intertek Testing Services and Amspec Agri. Now there are many oils competing for market share in the global vegetable oils market, and price changes in related oils impact the price of Palm Oil.
The Malaysian ringgit MYR= increased 0.86% in value against the US dollar following a 1.37% rise, reaching its highest level in more than five months. Palm oil loses appeal to foreign currency holders due to a stronger ringgit. A rising ringgit and profit-taking limit the market, but Malaysia's production and export prospects are encouraging. Additionally, the Malaysian market anticipates that the ringgit will continue to strengthen in the next few days. Recently, the ringgit experienced its highest one-day rise since March 2016, when it increased by a maximum of percent. According to Wan Aishah Wan Hamid, chief executive officer of MPOC, prices would be between 3,900 and 4,300 ringgits till March 2023 before falling even further to 3,800 to 4,200 ringgits in the second quarter.
As per the ChemAnalyst database, due to fluctuating currency values and choppy market dynamics, Palm Oil prices could remain volatile in the coming days. The balance of supply and demand will be swayed by shifts in weather patterns, the labor situation, currency volatility, and policy and geopolitical instability making the Palm Oil situation remain uncertain in 2023.