KUALA LUMPUR: Malaysian palm oil futures recouped early losses to gain on Monday, lifted by a steeper-than-expected decline in December inventories and production, but a sharp plunge in January exports so far capped the gains.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange ended up 41 ringgit, or 0.82%, at 5,034 ringgit ($1,199.14) a tonne, after hitting an intraday high of 2.6%.
December palm oil end-stocks in the world's second largest producer fell more than expected, down 12.88% from the previous month to 1.58 million tonnes, Malaysian Palm Oil Board (MPOB) data showed.
Production slumped 11.26%, while palm oil exports fell 3.48%, MPOB said.
Palm clocks best week since October on output concerns
"End stocks are way below analyst expectations and that would keep prices elevated," Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari said, adding that dry weather in soybean producer South America will also keep palm prices defensive.
"On the flip side, the poor demand in January will eventually keep the bulls moored," he added.
Exports during Jan. 1-10 fell 41% to 318,928 tonnes from the same period in December, independent inspection company AmSpec Agri Malaysia said.
January production estimates are also likely to fall in double digits due to the recent flooding, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Soyoil prices on the Chicago Board of Trade were up 0.5%. Dalian's most-active soyoil contract gained 1.5%, while its palm oil contract rose 1.6%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Comments
Comments are closed.