KUALA LUMPUR: Malaysian palm oil futures hit a one-week high on Monday, tracking gains in related edible oils on the Chicago Board of Trade and China’s Dalian Commodity Exchange.
Concerns that floods on the east coast of Peninsular Malaysia could hit production also supported the market, said traders.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange was up 0.7 percent at 2,621 ringgit ($642.56) a tonne at the midday break, heading for a second straight session of gains.
Earlier in the session, the contract hit its strongest level since Nov. 24 at 2,625 ringgit.
Traded volumes stood at 11,316 lots of 25 tonnes each at noon.
“The market is up on Dalian and soyoil strength,” said a futures trader from Kuala Lumpur.
“Although some are feeling jittery about the floods in Kelantan, Terengganu and small parts of Pahang, all bearish news is already factored in,” he said, referring to the flood situation in the east coast states of Peninsular Malaysia.
Year-end monsoon rains which lead to floods could hit palm oil production in the short term by disrupting the harvesting process.
Production in Malaysia, the world’s second largest producer after Indonesia, could see a monthly decline in November after industry regulator data showed that output hit the 2 million tonne mark in October, a gain of 12.9 percent from the previous month.
Palm oil is also impacted by movements in other edible oils as they compete for a share of the global vegetable oils market.
The January soybean oil contract on the Chicago Board of Trade was up 0.7 percent, while the January soybean oil contract on the Dalian Commodity Exchange was down 0.1 percent after rising as much as 0.6 percent.
In other related edible oils, Dalian’s January palm olein contract rose 0.6 percent.
Source: Brecorder.com
