Palm rises for a fourth day on supply concerns

KUALA LUMPUR: Malaysian palm oil futures rose for a fourth straight day on Thursday as supply concerns due to wider coronavirus curbs and heavy rains provided support, while the market awaits industry outlook.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange closed up 0.7%, at 2,890 ringgit ($696.39) a tonne.

Palm was traded higher on expectation of lower production as market participants await guidance from top industry analysts who will speak after trading hours on Thursday, a trader in Kuala Lumpur said.

Malaysia expanded virus curbs on movement to four more districts on Wednesday, three of them in its key palm producing state of Sabah on the island of Borneo.

Fears of output disruption surged after analysts said heavy rainfall brought by a La Nina weather pattern is expected to hit top producers Indonesia and Malaysia in the coming months.

"Malaysian production remains subdued, but Indonesia's output remains robust," said Paramalingam Supramaniam, director of Selangor-based brokerage Pelindung Bestari Sdn Bhd.

"The market need fresh inputs for a rally, which was lacking today."

Meanwhile, top buyer India, which typically stocks up on the edible oil ahead of November's Diwali festival of light, has yet to show an appetite for additional imports, he said.

Separately, Malaysian palm oil inventories probably rose in September to their highest in three months, a Reuters poll showed, as monthly output hit a near two-year high.

Palm oil may stay below a resistance at 2,897 ringgit per tonne or drop to 2,788 ringgit, Reuters technical analyst Wang Tao said.