Malaysian palm oil futures rebounded from early losses to rise over 1 percent in evening trade on Monday, as traders forecast improving demand in January and lower production in the coming months. The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange rose 1.2 percent to 2,625 ringgit ($657.07) a tonne at the close of trade. It earlier hit a daily high of 2,631 ringgit a tonne, its strongest level since November 24.
Trading volumes stood at 52,046 lots of 25 tonnes each at the end of the trading day. "The market is anticipating better exports ahead of data releases this week," said a futures trader in Kuala Lumpur. Another trader added that expectations of declining production also lent support to the market. Malaysia had announced on Friday it would exempt crude palm oil export taxes for three months starting January 8 to boost demand and lift prices.
January 1-10 export data from cargo surveyors Intertek Testing Services and Societe Generale de Surveillance are scheduled for release on Wednesday. Official data for December from the Malaysian Palm Oil Board is also scheduled for release on Wednesday. A Reuters poll showed that December end-stocks are forecast to have risen 5.1 percent to 2.69 million tonnes, its highest level in over two years.
In other related edible oils, the March soyabean oil contract on the Chicago Board of Trade edged up 0.3 percent, while the May soyabean oil on the Dalian Commodity Exchange was down 1.1 percent. The Dalian January palm oil contract declined 1 percent. Palm oil prices track the performance of other edible oils, as they compete for a share in the global vegetable oils market.
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