KUALA LUMPUR: Malaysian palm oil futures reversed early losses to rise 1% on Monday, as concerns over declining output outweighed shrinking November exports and losses in rival Dalian oils. The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange rose 42 ringgit, or 1.28%, to 3,330 ringgit ($814.58) a tonne.
Earlier in the session, the contract had dropped 3% to a near two-week low. But prices rose after industry groups estimated over 10% month-on-month fall in production during the first 20 days of November, according to traders. The contract was also weighed down by falling demand and possible rising stocks in China, a Kuala Lumpur-based trader said.
Exports from Malaysia during Nov. 1 to 20 fell 16% compared to the same period in October, as shipments to the Indian subcontinent contracted by almost half, data from cargo surveyors showed on Friday. High palm prices following a rally over the past few weeks have led to a drop in demand, according to Refinitiv Agriculture Research.
Dalian's most-active soyaoil contract fell 3%, while its palm oil contract slipped 3.8%. Soyaoil prices on the Chicago Board of Trade were up 1%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The market is being fuelled by talks of rare shipments from Indonesia to Malaysia on expectations of the former raising export levies next month to a range of $120/ton to $160/ton in a bid to keep funding its biodiesel program, said Kian Pang Tan, Refinitiv Agriculture Research senior analyst.
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