Malaysian palm oil futures rose on Thursday, reversing losses made in the previous trading session, over concerns that weather could hurt output. The palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was up 1.1 percent at 2,596 ringgit ($627.81) per tonne at the end of the trading session. Traded volume stood at 37,984 lots of 25 tonnes each.
"Demand isn't there but the weather is holding up the market," said a trader based in Kuala Lumpur. "There is some expected correction as exports are not very good. The market will try to find support at 2,500 ringgit." The dry weather effects of El Nino impacts palm's fresh fruit yields and lowers production levels. Government data from the Malaysian Palm Oil Board (MPOB) on Wednesday showed end-stocks and output falling for the month of January by 12.4 percent and 19.3 percent respectively.
Falling export numbers have capped palm's price gains in the recent weeks, as demand from top consumers China and India wanes. Malaysian shipments during the first 10 days of February fell by 23 percent compared with last month, according to cargo surveyor Intertek Testing Service, while Societe Generale de Surveillance showed a 39 percent drop. In competing vegetable oil markets, the US March soyoil contract gained 0.3 percent.
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