Emerging market currencies could weigh on crude palm oil futures

Indonesian rupiah notesIndonesian rupiah notes

Crude palm oil prices in Malaysia may gain on Wednesday, though weaker emerging market currencies are a concern.

Bursa Malaysia front-month palm oil futures for November gained 1.8 percent to 2,298 ringgit (US$555.47) a metric ton on volumes of 38,842 lots of 25 metric ton each.

The Indonesian rupiah crossed 15,000 to the dollar this week, creating concern on the country’s balance of payments, but helping palm exporters paid for products in dollars. Indonesia is trying to offset the impact of crude oil and refined product imports by mandating more palm and other edible oils grown at home to make biofuels for use in diesel supplies.

The Malaysian ringgit has also weakened as part of a drop in emerging market currencies caused by concerns that countries such as Turkey and Argentina are facing further hardship in meeting dollar payments for commodities.