KUALA LUMPUR: Malaysian palm oil futures climbed on Thursday for a fourth session in five, as a labour shortage stoked fears of lower output in the world's second largest producer early this year.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange gained 66 ringgit, or 1.31%, to 5,106 ringgit ($1,222.41) a tonne by the midday break. It had gained 1.07% overnight.
Sime Darby Plantation Bhd warned that labour shortages at palm oil plantations in Malaysia due to coronavirus border closures would worsen in early 2022, compared to the last six months, until workers were allowed to return.
Palm oil gains, set for third weekly rise on output worries
The world's biggest palm oil planter by land size said there was a shortage of more than 75,000 workers, resulting in a potential 20%-30% hit to production.
For the year, the Malaysian Palm Oil Board expects production to increase 4.9% from last year to 19 million tonnes.
Palm oil exports were forecast to climb 9.3% to 17 million tonnes while stockpile was estimated to grow 23.4% to 1.95 million tonnes.
Dalian's most-active soyoil contract gained 0.48%, while its palm oil contract rose 0.47%. Soyoil prices on the Chicago Board of Trade were down 0.77%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may test a support at 5,002 ringgit per tonne, a break below which could open the way to 4,927 ringgit, Reuters technical analyst Wang Tao said.
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