Palm higher as out­put rises more slowly than ex­pected

The Financial Daily - - NATIONAL -

KUALA LUMPUR: Malaysian palm oil fu­tures rose nearly 2 per­cent on Tues­day, hit­ting their high­est in nearly three weeks, as pro­duc­tion rose more slowly than ex­pected.

The bench­mark palm oil con­tract for March de­liv­ery on the Bursa Malaysia Deriva­tives Ex­change closed 0.8 per­cent higher at 2,178 ring­git ($529.15) a tonne, hav­ing ear­lier risen as much as 1.7 per­cent to 2,197 ring­git, its high­est since Dec. 20.

Trad­ing vol­umes stood at 45,785 lots of 25 tonnes each.

"Pro­duc­tion is see­ing a lesser in­crease than ex­pected, some up­dates also sug­gest a mar­ginal de­cline," said a Kuala Lumpur-based fu­tures trader, re­fer­ring to out­put data from the Malaysian Palm Oil As­so­ci­a­tion show­ing that De­cem­ber out­put rose 1 per­cent from the pre­vi­ous month.

A Reuters poll fore­cast Malaysian out­put to fall 3.6 per­cent to 1.78 mil­lion tonnes in De­cem­ber, while in­ven­to­ries are ex­pected to rise to 3.14 mil­lion tonnes, the high­est since Jan­uary 2000.

An­other phys­i­cal trader said that ex­ports were mov­ing out of Malaysia fol­low­ing In­dia's de­ci­sion to re­duce im­port taxes on South­east Asian palm oil.

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