KUALA LUMPUR: Malaysian palm oil futures climbed more than 3% on Tuesday, tracking gains in rival soyaoil and boosted by forecasts of lower production as a La Nina weather pattern brought heavy rains.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange settled 97 ringgit, or 3.57%, higher at 2,818 ringgit ($678.63), its highest close since Sept. 28.

“Crude palm oil futures opened higher following a bullish rally in soya oil futures on the CBOT overnight, as well as in Asian hours, and a strong rebound in crude oil prices,” said Anilkumar Bagani, research head of Sunvin Group, a Mumbai-based vegetable oil broker. The market is now waiting for data from the Malaysian Palm Oil Association and the Malaysia Palm Oil Board for further direction, he added.

The La Nina weather pattern, which brings higher rainfall in the world’s top palm producers, Indonesia and Malaysia, should boost yields and output in 2021 and reduce prices, Fitch Ratings said in a note. “However, higher rainfall could also lead to flooding which could hurt output and support prices in the next three to six months,” it added.—Reuters