Malaysian palm oil futures extended gains for a third day on Tuesday to mark their highest in nearly six months, buoyed by low production data from a regional palm oil association. The benchmark palm oil contract for March on the Bursa Malaysia Derivatives Exchange closed 1 percent higher at 2,468 ringgit ($575.29) a tonne. It earlier touched an intraday high of 2,473 ringgit, its highest since June 26.
"The knowledge of a huge production drop on the southern side" propped up the market this morning, said a Kuala Lumpur-based trader, referring to output in the Peninsular Malaysian southern state of Johor, which fell 22 percent from December 1-20 compared with last month. "Export demand will be unchanged or slightly better in January, so the market will be rangebound between 2,300 and 2,500 ringgit a tonne until then."
Traded volume stood at 32,616 lots of 25 tonnes each at the end of Tuesday's trading day. Malaysian shipments for the tropical oil fell this month on low consumer demand, contributing to record high stockpiles of near 3 million tonnes at the end of last month.
Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance reported a near 25-percent drop in exports from December 1-20 compared with the same time a month ago. In other vegetable oil markets, the US January soyoil contract fell 0.03 percent, while the May soybean oil contract on the Dalian Commodity Exchange gained 1 percent.