Palm oil edged higher for second session on supply concerns

• Palm prices have rallied since October, hitting their highest since February 2017, on Dec. 11.
• Malaysia, the world's second-largest producer and exporter of palm oil, raised its export tax for crude palm oil for January.
• Malaysia's palm oil inventories fell to a three-month low in November due to a seasonal decline in production.

KUALA LUMPUR: Malaysian palm oil futures gained for a second straight session on Tuesday, supported by worries over shortfall in stockpiles due to seasonal declines and tracking gains in rival soyoil prices.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange closed to trade higher by 1 ringgit, or 0.03%, at 2,876 ringgit ($689.69).

Earlier in the session, it climbed to an intraday high of 2,920 ringgit before retreating on profit booking.

Palm prices have rallied since October, hitting their highest since February 2017 on Dec. 11.

"The lower output in December added with firmness in the soy complex provided the catalyst for the positive start in the market," said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari Sdn Bhd.

Malaysia, the world's second-largest producer and exporter of palm oil, raised its export tax for crude palm oil for January, for the first time in one-and-a-half years, the Malaysian Palm Oil Board said on Friday.

Malaysia calculated a reference price of 2,571.16 ringgit ($616.59) per tonne for next month.

Poor rainfall in top producers Indonesia and Malaysia earlier this year is likely to curb yields of the tropical oil in the first half of 2020, according to traders and analysts.

Malaysia's palm oil inventories fell to a three-month low in November due to a seasonal decline in production, while exports dropped on slowing purchases by top importers. However, the decline was slower than expected.

Exports of Malaysian palm oil products during Dec. 1-15 fell between 15.5% and 18.6% from a month earlier, data from cargo surveyors showed.

Dalian's most-active soyoil contract traded 1.5% higher, while its palm oil contract rose 1%. Soyoil prices on the Chicago Board of Trade were also up at 1.5%.

U.S. soybeans rose for a fourth straight session on Tuesday to a more than one-month peak, as the expected finalization of an initial trade deal between Washington and Beijing raised prospects of increased purchases from China.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.