KUALA LUMPUR: Malaysian palm oil futures ended higher on Tuesday, as anticipation of a sharp decline in production and stronger export demand supported the market.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 28 ringgit, or 0.69percent, to 4,095 ringgit (USD1,010.61) a metric ton at the close.
The market was supported as traders are now expecting an output plunge of approximately 15 percent to 17percent for January and as exports have improved significantly, signaling strong demand, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
“Overall, if both these variables continue right up to March, there could be a significant drawdown on end stocks,” he said. Cargo surveyors estimated that exports of Malaysian palm oil products for January 1-20 rose between 8.64percent and 11.4percent from a month earlier.
Dalian’s most-active soyoil contract rose 0.43percent, while its palm oil contract added 1.2percent. Soyoil prices on the Chicago Board of Trade were down 0.04percent.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
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