KUALA LUMPUR: Malaysian palm oil futures rose more than 1 percent on Tuesday and hit its highest level in six weeks, tracking gains in US soyoil in Chicago and supported by prospects for an easing of production.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange closed 1.5 percent higher at 2,153 ringgit ($516) a tonne. It earlier climbed to 2,158 ringgit, its highest level since Nov. 1.
Trading volumes totalled 56,071 lots of 25 tonnes each.
"The market is higher tracking US soyoil," said a Singapore-based trader, adding that the market was also supported by easing production trends.
Palm oil production typically tapers off at the year-end after peaking between August and October. Malaysian output in November fell 6 percent to 1.85 million tonnes, down from the year's peak output levels of 1.96 million tonnes in October.
In other related oils, the Chicago January soybean oil contract was up 0.6 percent, while the January soybean oil contract on the Dalian Commodity Exchange gained 0.7 percent.
The Dalian January palm oil contract was up just 0.1 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 test resistance at 2,150 ringgit per tonne, a break above which could lead to a gain to 2,180 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
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