(May 10): Malaysian benchmark palm oil futures rose for a second consecutive day as the ringgit weakened and stockpiles declined in the world's second largest palm producer.
The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was 0.2% higher at RM2,668 (US$658) per tonne at the midday break.
It reached an intraday high of RM2,689, its strongest since April 25. Traded volumes were 47,944 lots of 25 tonnes each in the evening, versus a 2015 daily average of 44,600.
"The ringgit was weaker and end-stocks fell," said a trader from Kuala Lumpur, referring to April inventories as shown by government data from the Malaysian Palm Oil Board (MPOB).
The data, which was released at the market break at noon, showed a 4.5% decline in local stockpiles in April as output growth was less than expected. Production rose 6.7% from March to 1.30 million tonnes, compared with a 13.2% jump to 1.69 million tonnes in April last year.
A Reuters poll had forecast Malaysian stockpiles would decline amid slumping production versus a year ago.
Palm was also supported by a weaker ringgit, which fell 1.1% to 4.0530 against the dollar in trade on Tuesday evening. A weaker ringgit, the currency palm oil is traded in, makes the commodity cheaper for holders of foreign currencies.
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