Malaysian palm oil price edges up on stronger demand

Malaysian palm oil futures fell to a two-week low in late trade on Tuesday, dropping nearly 1 percent as the market was weighed down by expectations of rising production.

KUALA LUMPUR: Malaysian palm oil futures ended slightly higher on Wednesday, supported by a stronger export outlook and technical buying, though gains were capped by expectations of rising production in October.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was up 0.1 percent at 2,696 ringgit ($638.86) a tonne at the close.

Traded volumes stood at 42,652 lots of 25 tonnes each on Wednesday evening.

Palm earlier fell to an intraday low of 2,677 ringgit, its lowest level since Oct. 3.

"Players are concerned about much higher production coming in for Malaysia for the October month," said a futures trader from Kuala Lumpur.

Rising output could contribute to gains in inventory levels, which hit the 2 million tonne mark at end-September, official data from the Malaysian Palm Oil Board showed.

The market had seen stronger gains in earlier trade on better demand outlook and a technical rebound, traders said.

"The market came off a lot yesterday, so it is just a technical rebound," said a futures trader from Kuala Lumpur.

Another trader added that expectations of stronger export demand contributed to palm's morning gains.

"Exports overall could remain strong in the near term ... India may gear up purchases to cover some of the shortfall," he added, as stock levels at the world's largest vegetable oil consumer are low.

In other related edible oils, the December soybean oil contract on the Chicago Board of Trade was trading flat, while the January soybean oil contract on China's Dalian Commodity Exchange fell 0.8 percent.

The January palm olein contract declined 0.8 percent.

Palm's prices are impacted by movements of related oils as they compete for a share in the global vegetable oils market. - Reuters

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