KUALA LUMPUR: Malaysian palm oil futures rose on Wednesday to a two-week high buoyed by expectations of slowing production growth and improved exports, charting a fourth straight session of gains.
The benchmark third-month palm oil contract on the Bursa Malaysia Derivatives Exchange climbed 1.6 percent to 2,164 ringgit ($532.35) a tonne, reversing last week's losses.
"The futures seem to be riding on expectations of slower growth in production," a Kuala Lumpur-based trader said, citing updates from plantations that a heat wave was affecting output.
A bumper harvest last year in Malaysia and Indonesia, the world's major producers, had flushed the market with palm oil and dampened prices.
Stockpile concerns were further fanned after the European Union announced plans to phase out use of palm oil in renewable transport fuel by 2030.
Exports of Malaysian palm oil products for March 1-20 rose 0.8 percent to 925,431 tonnes from 918,047 tonnes shipped during Feb. 1-20, cargo surveyor Societe Generale de Surveillance said on Wednesday.
Independent inspection company AmSpec Agri Malaysia however reported a 2.3 percent fall in exports for the same period.
Another trader said there was some short covering as the market had fallen last week and there was positive sentiment building as Malaysia and Indonesia considered retaliatory action against the EU.
Palm oil dropped 2.8 percent last week.
Wang Tao, a Reuters market analyst for commodities and energy technicals said a break above 2,155 ringgit could lead palm oil to a gain to 2,190 ringgit.
The Chicago soybean oil was last up 0.4 percent.
The Dalian Commodity Exchange soyoil contract was up 0.4 percent, while palm olein contract rose 1 percent.
Comments
Comments are closed for this article.