Prices of Palm Oil are Projected to Rise For Global Importers from Malaysia
- 17-Nov-2022 5:40 PM
- Journalist: Motoki Sasaki
Kuala Lumpur (Malaysia): According to the speculations by ChemAnalyst experts, the prices of Palm Oil in the global market are likely to increase, backed by strengthened ringgit firms. Recently, Malaysian Palm Oil futures fell more than 4.5% due to a stronger ringgit and weakness in rival vegetable oils, even as supply fears over floods in the second-largest producer in the world grew.
The ringgit (MYR), which is used by palm as its trading currency, gained 0.7% versus the dollar and increased for a second straight day, as per the Malaysian Palm Oil Council (MPOC) report. The commodity becomes expensive for purchasers using other currencies due to a greater ringgit. In addition, flooding has been reported recently throughout Malaysia, the world's second-largest Palm Oil producer, as the monsoon season, intensified there.
In a note published earlier, the Malaysian Palm Oil Council, a state agency, predicted that the price of edible oil would remain between 4,000 and 4,400 ringgit per tonne until the end of December 2022 for both its domestic and global markets. This prediction was based on supply concerns related to floods and a stronger ringgit. Since last week, when it reached a high of 4.592 against Friday's (Nov. 11)'s close of 4.6200, the local currency, the ringgit, has increased in value by 2.64% against the US dollar. This increase has been fuelled by Q3 economic growth that was greater than anticipated. Because importers will have to pay more than before, currency volatility will have a greater impact on the worldwide market.
As per the ChemAnalyst database, the price of Palm Oil has been increased by 5%, backed by the heavy downpours for the past weeks, and there have been minor floods. In addition, strengthening its local currency would further support the increase in the price of Palm Oil for the global market.