- Sept 1-15 exports up 54% from Aug 1-15
- Malaysia's September output may not sustain August's rise
KUALA LUMPUR: Malaysian palm oil futures rose more than 1% on Wednesday, marking a gain for a third straight session, as robust exports in the first half of September and growing concerns over sluggish production boosted prices.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange gained 70 ringgit, or 1.61%, to 4,410 ringgit ($1,060.86) a tonne by the midday break.
Exports during Sept. 1-15 soared 54% to 832,555 tonnes from the same week in August, cargo surveyor Amspec Agri said.
"After the spike in August production, it was popularly believed that September will have the same tempo. However, we notice that it's not the case, production is again weak," said Paramalingam Supramaniam, a director of Malaysian brokerage Pelindung Bestari.
"And, with India lowering import taxes to curb food inflation, palm prices are relatively defensive."
August output had expanded 11.8% from the previous month to stand at 1.7 million tonnes, the Malaysian Palm Oil Board said last week.
Indonesia's production during the second half of 2021 may miss expectations because of the lingering impact of drought in 2019 and insufficient fertiliser use, UOB KayHian said in a note.
Incessant rains that have caused flooding in central and east Kalimantan since August could be a precursor of the upcoming monsoon season in Southeast Asia that could keep availability tight, it added.
Dalian's most-active soyoil contract rose 0.8%, while its palm oil contract gained 2.3%. Soyoil prices on the Chicago Board of Trade were up 0.6%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The exchange will be closed on Thursday for a public holiday.
Palm oil may retest a resistance at 4,384 ringgit per tonne, a break above which could lead to a gain to 4,439 ringgit, Reuters technical analyst Wang Tao said.