Malaysian palm oil price gains to new 20-month high on lower output


  • Business
  • Wednesday, 03 Feb 2016

The palm oil contract for April on the Bursa Malaysia Derivatives Exchange had gained 1.3 percent to 2,547 ringgit ($603.70) per tonne at the end of Wednesday. It earlier reached an intraday high of 2,551 ringgit, its strongest level since May 19, 2014.

KUALA LUMPUR: Malaysian palm oil futures rose for a second trading day to reach a new 20-month high on Wednesday as traders forecast lower palm oil output in February due to the Lunar New Year public holidays.
    The palm oil contract for April on the Bursa Malaysia Derivatives Exchange had gained 1.3 percent to 2,547 ringgit ($603.70) per tonne at the end of Wednesday. It earlier reached an intraday high of 2,551 ringgit, its strongest level since May 19, 2014.
    Traded volume stood at 60,141 lots of 25 tonnes each.
    "Production was down last month and this month is expected to be down again," said a trader from a palm oil brokerage in Kuala Lumpur.
    "There is Chinese New Year, so there are fewer harvesting
days, coupled with other public holidays plus fewer calendar
days in February."
    Palm oil output in top producers Malaysia and Indonesia is
seeing a decline in line with the seasonal trend, and as the dry
weather impact from the El Nino last year kicks in.

    A weaker ringgit on Wednesday could have also lent support
to palm, as this makes the vegetable oil cheaper for holders of
foreign currencies. 
    The ringgit, the currency palm is traded in, lost 0.3
percent to reach 4.2190 per dollar on Wednesday as investors
weigh in concerns over falling oil prices and allegations
surrounding Malaysia's debt-laden state fund 1Malaysia
Development Berhad (1MDB). 
    In competing vegetable oil markets, the U.S. March soyoil
contract gained 0.6 percent, while the May soybean oil
contract on the Dalian Commodity Exchange rose 0.3
percent.
    
  Palm, soy and crude oil prices at 1013 GMT
                                                                                  
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      FEB6    2455   +23.00    2438    2459     427
  MY PALM OIL      MAR6    2506   +23.00    2474    2508    4414
  MY PALM OIL      APR6    2547   +32.00    2507    2551   28753
  CHINA PALM OLEIN MAY6    4768   +30.00    4738    4784  700608
  CHINA SOYOIL     MAY6    5642   +18.00    5608    5662  337542
  CBOT SOY OIL     MAR6   30.98    +2.80   30.70   30.99    4169
  INDIA PALM OIL   FEB6  456.40    +2.80  454.50  456.90     937
  INDIA SOYOIL     FEB6  618.80    -0.75  617.50  621.70   23970
  NYMEX CRUDE      MAR6   30.31    +0.43   29.40   30.60   66052
                                                                                  
  Palm oil prices in Malaysian ringgit per tonne
  CBOT soy oil in U.S. cents per pound
  Dalian soy oil and RBD palm olein in Chinese yuan per tonne
  India soy oil in Indian rupee per 10 kg
  Crude in U.S. dollars per barrel
 
($1 = 4.2190 ringgit)
($1 = 68.1500 Indian rupees)
($1 = 6.5770 Chinese yuan)    
- Reuters
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