Palm jumps on hopes of muted production, higher exports

[SINGAPORE] Malaysian palm oil futures rose nearly 1.5 per cent on Friday as traders expect another month of subdued production and improving exports.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange climbed for a third consecutive session, up RM48 ($15.78), or 1.4 per cent, at RM3,426 a tonne by midday.

"The market is anticipating negative growth in December production and improving exports," a Kuala Lumpur-based trader told Reuters. "We are also expecting January export tax to remain at zero." Exports of Malaysian palm oil products during Dec 1 to 15 rose 9.5 per cent on-month to 725,380 tonnes, cargo surveyor Societe Generale de Surveillance said on Tuesday.

Meanwhile, Malaysia's palm oil end-stocks in November fell to their lowest in more than three years as production slumped and exports fell more than expected, data released by the Malaysian Palm Oil Board last week showed.

Also, supporting prices were gains in rival oils elsewhere.

Dalian's most-active soyoil contract rose 2.1 per cent, while its palm oil contract gained 1.5 per cent. Soyoil prices on the Chicago Board of Trade were last up 0.2 per cent, after rising more than 1 per cent overnight on South American crop concerns.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

REUTERS