KUALA LUMPUR: Malaysian palm oil futures rose more than 1 percent on Friday to a three-week peak, supported by expectations of slowing output in Malaysia and easing stock levels in Indonesia.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange closed up 1.1 percent at 2,068 ringgit ($494) a tonne for a third consecutive session of gains. It earlier reached 2,071 ringgit, its highest level since Nov. 22.
Palm has gained 3.5 percent this week after two straight weekly falls.
Trading volumes on Friday totalled 36,523 lots of 25 tonnes each.
“Production this month is expected to be down (from the previous month),” said a Singapore-based trader, adding that inventories in Indonesia were also seen declining. “Malaysian refiners imported so much (from Indonesia) last month.”
Malaysian palm oil imports from neighbouring Indonesia rose in October and November, as high output and inventories forced
Indonesian sellers to lower prices of the edible oil, making shipments cheaper than Malaysian oil even with shipping costs.
Industry regulator data showed Malaysian palm oil production in November slid 6.09 percent from the previous month to 1.85 million tonnes, and is forecast to decline further in December. <MYPOMP-CPOTT>
Palm oil production seasonally peaks between the third and fourth quarters of the year before declining towards the year-end.
In other related oils, the Chicago January soybean oil contract slipped 0.7 percent, while the January soybean oil contract on the Dalian Commodity Exchange fell 1 percent.
Meanwhile, the Dalian January palm oil contract was up 1 percent.
Palm oil prices are affected by changes in soyoil prices, as they compete for a share in the global vegetable oil market.
Palm oil may gain further into a range of 2,074-2,103 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.