Malaysian palm oil futures staged a turnaround on Tuesday, reversing earlier losses, after traders forecast sharp falls in December output. The benchmark palm oil contract for March on the Bursa Malaysia Derivatives Exchange ended the trading day 0.7 percent higher at 2,452 ringgit ($564.98) per tonne. It earlier reached a new two-week low of 2,421 ringgit. "The drop in production is seen to be severe, and lots of refineries are already stocking up on crude palm oil. That's why prices are showing signs of recovery," said a trader from Kuala Lumpur.
December palm oil data from government body Malaysian Palm Oil Board (MPOB) is expected to show a fall in production as fruit harvest volumes enter their seasonally low period. The data will we released on January 11. Palm fruit yields in the first quarter of 2016 should also decline because of the dry El Nino weather effects, lending support to market prices. Malaysian exports are also seen stagnating in December. Cargo surveyor data showed the tropical oil fell about 5-6 percent compared with the month before.
Traded volume stood at 31,044 lots of 25 tonnes each by the end of the trading day. In competing vegetable oil markets, the US March soyoil contract rose 0.5 percent while the May soybean oil contract on the Dalian Commodity Exchange gained 0.5 percent.
Comments
Comments are closed for this article.