KUALA LUMPUR: Malaysian palm oil futures rose 2 percent on Tuesday, a second consecutive session of gains on stronger export demand and expectations of weaker production.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange was up 2 percent at ,500 ringgit ($612) a tonne at the midday break, its sharpest daily rise since Dec. 15.
It had risen to an intraday high of 2,505 ringgit, its highest level in a week. Palm however has declined about 4 percent so far this month after November’s 7.5 percent drop. “The market is looking at export figures, positive figures will see some recovery,” said a Kuala Lumpur-based trader, referring to Malaysian palm oil shipment data from cargo surveyors Intertek Testing Services (ITS) and Societe Generale de Surveillance (SGS). “The market has been beaten down badly, so some positive news can bring it up as all bad news may have been priced in.
Exports of Malaysian palm oil products for Dec. 1-25 rose 1 percent from a month earlier, data released by ITS before the midday break on Tuesday showed.
SGS reported in the evening a 1.3 percent gain in Malaysian shipments for the same time period. Demand for the tropical oil is expected to improve in the coming weeks, as key buyer China stocks up ahead of the Lunar New Year holidays in February. In other related edible oils, the May soybean oil contract on the Dalian Commodity Exchange was up 0.3 percent, while the Dalian January palm olein contract also rose 0.3 percent.
