KUALA LUMPUR: Malaysian palm oil futures ended higher on Monday, recovering from an earlier more than two-week low, as traders forecast falling production in the coming weeks.
The market earlier fell on the back of a stronger ringgit and cautious trading ahead of cargo surveyors’ export data releases.
A stronger ringgit typically makes palm oil more expensive for holders of foreign currencies. The ringgit has gained over 2 percent since the start of the year, and over 11 percent since 2017.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange was up 0.7 percent at 2,554 ringgit a tonne at the close of trade. Earlier in the session, it fell to 2,525 ringgit, its weakest since Dec. 29.
Trading volumes stood at 43,196 lots of 25 tonnes each at the end of the trading day.
“The market is expecting lower production,” said a Kuala Lumpur based trader, while another trader added the market rose on technical buying.
Palm oil production typically falls in the first quarter of the year in line with seasonal trends.
In other related edible oils, the May soybean oil on the Dalian Commodity Exchange was down 0.1 percent, while the Dalian January palm oil contract declined 0.4 percent.
Palm oil tracks the performance of other edible oils, as they compete for a share in the global vegetable oils market.
Source: Brecorder.com
