KUALA LUMPUR: Malaysian palm oil rose 1.4 percent in the first-half session, supported by data showing lower production and improved exports.
Benchmark palm oil futures for March delivery on the Bursa Malaysia Derivatives Exchange rose to 3,071 ringgit ($692.29) per tonne. Traded volumes were thin with 27,002 lots of 25 tonnes each changing hands.
A trader based in Kuala Lumpur said a fall in production strong export data and a weak ringgit were providing support to the palm futures.
“A few factors are affecting prices today – the production picture, the weaker ringgit, coupled with strong export estimate numbers,” the trader said, adding stronger exports and a drop in production were positive factors in the short run.
Southern Peninsula Palm Oil Millers’ Association (SPPOMA) released data on that noting a drop of 21.8 percent in production for January.
Exports of Malaysian palm oil products for January rose 8.1 percent to 1,174,893 tonnes from 1,086,523 tonnes shipped during December, cargo surveyor Intertek Testing Services said on Tuesday.
“Market is firmer today riding on overnight strength on CBOT and SPPOMA updating the full January production figures,” the trader said.
Technical buying could be lending some support to the futures as well, the trader said. The Malaysian ringgit, the currency in which the futures contract is traded, fell 0.2 percent to 4.436. A weaker ringgit makes palm more attractive to traders holding foreign currencies.
On the Chicago Board Of Trade, the January soybean oil contract was up 0.1 percent. The Dalian Commodity Exchange is closed for the Lunar New Year celebration, and will resume trading on Feb. 3.
