Ringgit talk lifts KL palm oil at close

Ringgit talk lifts KL palm oil at close

KUALA LUMPUR (Reuters): Persistent talk that the Malaysian government may devalue the ringgit pushed up palm oil futures at the close on Thursday, traders said.

Rumors circulated in the market that the currency would be devalued to 4.02 ringgit against the dollar from 3.8 at present.

"People are not comfortable with these rumors, that's why you see so much short covering today. There's a question mark about the devaluation," said one trader in Kuala Lumpur.

The government has said it will only consider lowering the peg if neighboring currencies drop 20 percent or more against the ringgit.

Benchmark June futures ended the day 15 ringgit higher at 877 ringgit ($230.78) a ton after trading as high as 882. Volume was heavy at 2,341 lots.

"There are so many rumors about the devaluation. But expectations of lower output in March is still in the air, which was another reason why the market went up," said another trader.

Private forecaster Ivan Wong is expected to release his estimates for March output, stocks and exports on Friday. He earlier said March palm oil output was seen down five percent to 842,000 tons from February.

Separately, industry officials in India said the country's soyoil imports are likely to rise marginally in coming months as lower customs duties encourage a switch from palm oil.

"Lower customs duties on soyoil compared to other edible oils may result in more imports in the next few months," Mansukhbhai Patel, president of Central Organization for Oil Industry and Trade (COOIT), told Reuters.

Physical April (south and central) CPO was offered at 855 ringgit a ton against bids of 850, and deals were reported at 850 to 855 ringgit for south and at 850 for central.

Physical May (south and central) crude palm oil saw offers at 875 ringgit a ton against bids of 870. Business was reported at 865 to 870 for south and at 870 for central.