March 21, 2023 (MLN): Crude palm oil prices gave up early gains during later hours of trading in Asian markets as the stronger Malaysian ringgit during the session kept buyers on the sidelines, a Kuala Lumpur-based trader has reported.
The stronger ringgit makes palm oil more expensive for foreign buyers, leading to a slowdown in demand.
According to cargo surveyor data, Malaysian exports of edible oil picked up in March, providing some positive news for the industry.
Despite the increase in exports, the Bursa Malaysia Derivatives contract for June delivery remained unchanged at MYR3,785 a metric ton. The lack of movement in the contract price indicates that the mixed outlook for the industry has left traders uncertain about the future of palm oil prices.
Palm oil is an essential ingredient in many food and household products, including cooking oil, margarine, and soap. The industry has been hit hard by the COVID-19 pandemic, as lockdowns and travel restrictions have reduced demand for these products.
While the recent increase in exports is positive news for the industry, the uncertainty around palm oil prices is likely to continue until the global economy fully recovers from the pandemic.
With the Malaysian ringgit remaining strong, it remains to be seen how demand for palm oil will be impacted in the coming months.
