KUALA LUMPUR: Malaysian palm oil futures ended higher on Monday, lifted by a surge in exports during the first half of November, although persistently high prices raised demand concerns.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange closed up 30 ringgit, or 0.61%, to 4,965 ringgit ($1,193.51) a tonne.
Exports from Malaysia during Nov. 1-15 jumped between 10% and 27% from the month before, according to data by cargo surveyors.
However, a narrowing price spread between crude palm oil and soyoil is making palm unfavourable and may hurt demand, a Kuala Lumpur-based trader said.
"Crude palm oil in Malaysia needs to adjust lower to continue attracting buyers," the trader said.
Stronger exports and weaker production will likely push palm oil inventories lower in November, Refinitiv Agriculture Research said in a note.
Palm oil output has shown some signs of weakness, as it has started to enter the low crop cycle and is further hit by wet weather conditions, according to two Refinitiv analysts.
The contract may trend up towards a resistance at 4,930-4,950 ringgit this week, with support at 4,615-4,635 ringgit, they added.
Dalian's most-active soyoil contract gained 0.2%, while its palm oil contract rose 0.4%. Soyoil prices on the Chicago Board of Trade were down 0.7%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Crude oil prices fell on expectations of increasing supply, while higher energy costs and rising COVID-19 cases are also seen weighing on demand.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.