KUALA LUMPUR: Malaysian palm oil futures trimmed early gains after profit-taking on Wednesday, and closed marginally higher underpinned by expectations of lower July production.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange closed up 14 ringgit, or 0.53%, at 2,655 ringgit ($624.63) a tonne.
Palm rose to an intraday high of 2.7%, hitting their highest level in over five months.
The Malaysian Palm Oil Association forecast crude palm oil production during July 1-20 to fall 8.9% from the month before, traders said.
Total palm oil output in top producers Indonesia and Malaysia is expected to fall in 2020 hampered by a labour shortage, and last year's dry weather and lower fertiliser application, the Council of Palm Oil Producing Countries (CPOPC) said.
Dalian's most-active soyaoil contract fell 0.03%, while its palm oil contract climbed 0.88%. Soyaoil prices on the Chicago Board of Trade were down 1.34%.
"Palm oil has been trading higher since the last couple of weeks on expectations of loss in production due to rains and shortage of labour," said Anilkumar Bagani, research head of Sunvin Group, a Mumbai-based vegetable oil broker. Edible oil refiners in Nepal have all but stopped buying crude palm oil amid surging domestic stockpiles after top buyer India suspended most imports of refined oil from the country, industry officials told Reuters.
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