KUALA LUMPUR: Malaysian palm oil futures ended at a more than 8-year high on Monday, gaining for the third straight session, on hopes of improving exports and stronger rival oil prices. The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange closed up 42 ringgit, or 1.23%, to 3,452 ringgit ($851.50) a tonne, marking its highest closing since May 2, 2012.
Palm is trading just $1 below rival soyaoil on the Chicago Board of Trade, which is up 1%.
"There will be a push and pull on palm futures to reclaim the discount to bean oil," said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
The focus is now on Dec. 1-15 export volume data, due on Tuesday, and the announcement of Malaysia's crude palm oil export tax for January, which will effectively end a six-month tax exemption.
"(Palm) futures are likely to see a downward move on the announcement as it makes Malaysian crude palm oil more expensive in the export market as ringgit is already sharply higher," Varqa said.
The market is expecting Dec. 1-15 exports from Malaysia to rise 7% from the month before, traders and analysts said.
Meanwhile, the Malaysian Palm Oil Board (MPOB) said last week November production fell 13.51% from October to 1.49 million tonnes, its lowest since March.
The market expects output in December to remain squeezed as rainy weather brought on by La Nina is expected to persist until the first quarter of next year.
Dalian's most-active soyaoil contract and its palm oil contract were up 2%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market. Oil prices rose, pushing Brent back above $50 a barrel, making palm a more attractive option for biodiesel feedstock.
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