Malaysian crude palm oil futures rose 1.5 percent on Monday as robust export numbers from cargo surveyors lifted the market amid worries that rain and floods had affected harvest and transport activities.
Traders said firm soybean oil markets also induced palm oil to tread higher, extending a rebound in prices that had been on a downtrend since peaking at 3,068 ringgit in November. The benchmark March contract on the Bursa Malaysia Derivatives Exchange finished up 45 ringgit, or 1.5 percent, at 2,975 ringgit ($891) a tonne.
"The big story now is whether palm oil supplies can make it through the rain and floods to reach buyers and there is good demand out there as seen with export data," said a senior dealer with a commodities trading firm. Other traded months rose between 30 and 41 ringgit. Overall trade stood at 6,190 lots of 25 tonnes each.
Exports of Malaysian palm oil products for December 1-15 rose 5.9 percent to 728,067 tonnes from 687,539 tonnes shipped between November 1 and 15, cargo surveyor Intertek Testing Services said on Saturday. Another cargo surveyor, Societe Generale de Surveillance, said exports during the period rose 11.5 percent to 747,834 tonnes.
Floods in Malaysia have killed 17 people, left more than 20,000 homeless, and more rain is expected, local media reported. The monsoon rains have cut off roads in several states including Kelantan and Terengganu in the east and Johor in the south, plantation officials said.
"In some cases, trucks cannot even leave the estates because it is so waterlogged," said an official of a leading plantation firm. "And the quality is getting affected." Traders say that Malaysia's overall palm oil output may fall by 30 percent in December. Floods also hit the Southeast Asian country last year in December, driving down output by more than 26 percent.
"For the time being, palm oil has turned its back on the crude oil market because it doesn't seem to go above or below $91 a barrel," said an analyst with a local brokerage firm. "Demand and supply issues are more important. Crude markets have had a growing influence on palm oil and soyoil prices because of the use of edible oils to produce biofuels, which compete with petroleum diesel.
Soybean futures at the Chicago Board of Trade soared to a fresh 34-year high on Monday on continued support stemming from strong demand. The soyoil market was also strong. In Malaysia's physical market, crude palm oil for December shipment in the southern region was quoted at 2,960/2,970 ringgit a tonne. Trades were done between 2,950 and 2,960 ringgit.
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