Malaysian palm oil price near five-month high

Harvesting oil palm fruit bunches is a skilled job that cannot be automated and relies heavily on manual labour. Photo: Malaysian Palm Oil Council

KUALA LUMPUR: Malaysian palm oil futures surged to a near-five-month high in evening trade on Monday, supported by forecasts of slower than expected output growth and technical buying despite weaker export data from cargo surveyors.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange rose 1.1 percent to 2,711 ringgit ($632.60) for its strongest daily gain in more than a week. The contract earlier touched 2,720 ringgit, its highest since March 29.

Traded volumes stood at 67,988 lots of 25 tonnes on Monday evening.

"The market believes there may be negative growth in production," one Kuala Lumpur futures trader said. "There's also some technical buying as we break new highs."

Palm oil was trading cautiously earlier in the day ahead of data from cargo surveyors, traders said.

Malaysian palm oil shipments for Aug. 1-20 fell 14.7 percent from the same period last month, according to Intertek Testing Services, as demand from Europe and India fell. Societe Generale de Surveillance reported a 15.3 percent decline.

Palm oil could rise to 2,706 ringgit a tonne, said Wang Tao, Reuters market analyst for commodities and energy technicals.

In related oils, the October soybean oil contract on the Chicago Board of Trade was last up 0.2 percent while January soybean oil on the Dalian Commodity Exchange was up 0.9 percent. The January palm olein contract gained 1.6 percent.

Palm oil prices are affected by movements in other edible oils that compete for a share in the global vegetable oils market. - Reuters