(April 1): Malaysian palm oil futures rose on Friday, charting a third session of gains this week and tracking competing vegetable oils.
Gains could be capped by a stronger ringgit and as an export tax on crude palm oil (CPO) starts in April, traders said.
The palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange gained 0.8% to reach 2,748 ringgit (US$707) per tonne in evening trade. Volumes were 41,031 lots of 25 tonnes each versus a 2015 daily average of 44,600 lots.
"Dalian and the Chicago Board of Trade is strong so our market is up, but it could come under pressure because of the ringgit," said a Kuala Lumpur-based trader.
"The market views the ringgit strength as a bearish factor for exports, coupled with (CPO export) taxes for April. We'll have lots of fluctuations these few sessions."
The ringgit hit 3.8820 against the dollar on Friday, its strongest in seven months, as the Federal Reserve raised doubts about US rate hikes this year. It gained 0.3% on Friday evening to trade around 3.8890.
Malaysian crude palm oil shipments are expected to take a hit this month, said the trader, as the government raised its export tax to 5% in April and ending a duty-free policy held since May 2015.
Palm oil shipments for March 1–31 surged 22%–24% from a month earlier, data released by cargo surveyors showed on Thursday, boosted by demand from India.
Technical charts show palm oil could gain support at RM2,716, as it failed to break a resistance at RM2,776, according to Reuters market analyst for commodities and technicals Wang Tao.
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