JAKARTA, Dec 30: Malaysian palm futures rose more than 5 per cent on Tuesday to finish at a 10-week high on expectations of stronger December palm oil exports, traders said.

The benchmark March palm oil contract on the Bursa Malaysia’s Derivatives Exchange rose 81 ringgit, or 5.1 per cent, to 1,671 ringgit ($480) per tonne, the highest close since Oct. 21.

Other traded contracts rose between 70 ringgit and 84 ringgit. Overall volume was 10,556 lots of 25 tons each.

The market is riding on anticipation of strong palm oil exports. The market was talking about December exports of 1.55 to 1.6 million tons, said a trader with a Kuala Lumpur-based commodities brokerage.

Exports of Malaysian palm oil products for the first 25 days of December rose 24 per cent to 1,345,325 tons from 1,087,865 tons shipped between Nov. 1 and 25, Intertek Testing Services said on Friday.

Stronger exports are key to reducing Malaysian palm oil stocks, which hit a record high of 2.27 million tons in November amid higher production and weak demand.

The important thing people are looking at is an end to stocks. If stock does not show any signs of falling below 2 million tons, the market is going to be under pressure again next year, a trader at a Malaysian brokerage said.

He said the market also gained support from recent strength in crude oil prices, which have also pushed up prices of other vegetable oils.

The most active March soybean oil contract rose 2.27 per cent to 33.27 cents per pound in Asian trading.

The first trader said that although palm oil stock may stay at about 2 million tons, the market can sustain its uptrend if exports continue to be strong in January.

In physical markets, Malaysian palm oil for December and January deliveries was traded at 1,655-1,670 ringgit per ton in the southern region and at 1,650-1,660 ringgit per ton in the central region.

In Indonesia, world’s largest palm oil producers, the state market centre did not hold a palm oil auction. The next auction will be on Jan. 5.—Reuters