Malaysian palm oil prices rose to their highest close in over four weeks on Tuesday as strong demand for the commodity and talks of improving exports data support sentiment. Investors in the palm oil market are awaiting export data from cargo surveyors for the first 10 days of May and Malaysian Palm Oil Board's monthly report for direction.
The benchmark palm oil third-month contract price on the Bursa Malaysia Derivatives Exchange rose 1.2 percent to 2,627 ringgit ($604.60) per tonne, the highest close since April 7.
The contract rebounded from a 0.2 percent drop by midday break. Traded volumes stood at 42,069 lots of 25 tonnes each. "There is talk of improving export data. Meanwhile, the nearby stock is still quite tight and demand is good," said a trader in Kuala Lumpur. Demand has been strong ahead of Ramadan, the Muslim month of fasting which starts later in May.
Malaysian palm oil production in April is estimated to have risen nearly 9 percent to its highest level in six months, according to a Reuters poll of planters, traders and analysts, though levels were higher before the dry El Nino weather pattern disrupted output in 2016. April output in Malaysia, the world's second-largest palm oil producer, was seen rising to 1.59 million tonnes, up 8.8 percent from March and its highest level since October, according to the poll.
"Once the data is actually out, we may see some correction," the trader added. The MPOB's data is expected on Thursday. Malaysian markets will be closed on Wednesday for Vesak day. In other vegetable oil markets, soyabean oil on the Chicago Board of Trade was 0.2 percent higher, while the September soyabean oil contract on the Dalian Commodity Exchange was up 0.4 percent. The September contract for palm olein rose nearly 1 percent.
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