KUALA LUMPUR: Malaysian palm oil futures rose more than 1 percent in afternoon trade on Tuesday, rebounding from a sharp decline earlier in the session, lifted by bullish sentiment on falling production.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was up 0.8 percent at 2,494 ringgit ($635.41) a tonne at the close for a second consecutive daily gain.
It touched an intraday high of 2,508 ringgit but had shed as much as 0.9 percent earlier in the session on a stronger ringgit , which usually weighs on the tropical oil by making it more expensive for holders of foreign currencies.
Trading volumes stood at 48,453 lots of 25 tonnes each on Tuesday evening.
“The market fell on production figures from the Malaysia Palm Oil Association,” one Kuala Lumpur-based trader said, adding that it showed a 17 percent decline in Malaysia’s production from Jan. 1-20 compared with the same period last month.
“The market is also up on a technical rebound; prices fell too low earlier,” the trader said.
Palm oil output is expected to register seasonal declines in the first quarter before picking up and heading towards peak production in the third quarter.
In related edible oils, the March soybean oil contract on the Chicago Board of Trade edged up 0.6 percent while May soybean oil on the Dalian Commodity Exchange gained 0.7 percent.
The Dalian May palm oil contract rose 0.5 percent.
Palm oil prices are affected by movements of related edible oils that compete for a share in the global vegetable oils market.
Source: Brecorder.com
