KUALA LUMPUR: Malaysian palm oil futures hit a five-month high, surging more than 2% on Thursday’s close, driven by high demand from India and worries about production supply in major palm-producing countries.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 109 ringgit, or 2.7%, to 4,152 ringgit ($1,002.90) a metric ton at closing, the highest close since April 15.
The contract has risen 11% over the last seven sessions. Robust demand from India, driven by domestic consumption and restocking prior to the festive season, is keeping palm oil prices high alongside concerns about the stagnant to declining palm oil production in Malaysia and Indonesia due to current weather conditions, Marcello Cultrera, a grains, oilseeds and softs broker for SSY Global, said.
“As the northeast monsoon season approaches and the production cycle slows, there are growing worries about reaching a production peak in October.” On Wednesday, the ASEAN specialised meteorological centre reported that wetter conditions are expected for most of the equatorial region between September 30 and October 13.
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