KUALA LUMPUR, Aug 21: Malaysian crude palm oil futures closed 1.3 per cent higher on Tuesday, lifted by rising prices of rival soybean oil but gains were limited by continued fears of swelling stocks due to a seasonal uptick in production.
Players kept a wary eye on financial markets as concern about a global credit crunch hit European shares again on Tuesday, despite sharp gains in Asia, while investors moved money from riskier assets.
The palm oil market has noticed that US soyabean oil prices have been going higher and this was a cue to move up as well, said a leading trader.
But there is talk that production will rise by 20 per cent for August, which is depressing the market a little. Other traded months rose between 18 and 38 ringgit.
Overall trade halved to 6,909 lots of 25 tons each from around 12,000 lots that change hands on a routine trading day.
Palm is keeping a close eye on the regional equity markets because there is talk that economic growth might still get impacted, which does not bode well for demand in the future, said another trader.—Reuters
