Malaysia's palm oil futures recouped losses to end higher on Friday as dealers covered positions due to persistent worries about supply. Dealers said record high crude oil prices, which might trigger more purchases of bifocals, and worsening haze from Indonesian forest fires supported the market, which awaits August 1-15 palm oil export data on Monday.
The third-month October crude palm oil contract on Bursar Malaysia Derivatives last traded at 1,378 ringgit ($367.47) a tonne, having risen to a three-week high at 1,410.
That compared with Thursday's close of 1,367 ringgit. Overall volume was moderate at 3,152 lots.
The October contract rose 10 ringgit on Thursday on short covering after Kuala Lumpur declared an emergency in two areas of a major growing state as choking haze from fires in Indonesia blanketed parts of peninsular Malaysia.
"Talking about the short-term outlook, we are looking to trade at 1,400 ringgit," said one dealer in Kuala Lumpur.
"Haze will have an impact on production.
This means slow harvesting, which will be followed by lower output," he said. The haze has sent asthma attacks soaring in Malaysia, forced schools to close, grounded flights and disrupted shipping.
"We saw some late covering because people wanted to cut their losses. People say that exports will be as good as in the first 10 days of August," another Kuala Lumpur dealer said.
Malaysian exports of oil palm products for August 1-10 rose 18.5 percent to 391,214 tonnes from 330,050 for July 1-10, cargo surveyor Society Generale de Surveillance said.
In the physical sector, August crude palm oil was offered at 1,365 ringgit a tonne against bids at 1,360 ringgit in the southern and central regions.
Deals were done at 1,355 to 1,360 ringgit.
September (south and central) saw bids at 1,370 ringgit against offers at 1,380.
Trade was reported at 1,365 to 1,370 in the southern region only.
PALM OIL FUTURES:
August (south): 1365
Open/High/Low: 1365/1410/1360
Previous closes: 1360
PALM OIL PHYSICALS:
October (third month): 1378
Previous settlement: 1367
FUTURES: Rebounded on pre-weekend covering.
PHYSICALS: Steady demand offers support for futures.
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