JAKARTA, Jan 12: Malaysian palm futures rose 3.5 per cent on Monday after the industry regulator announced a drop in end-December palm oil stocks from a record high the month before, traders said.

The rally was also underpinned by news that Malaysian palm oil exports for the first 10 days of January came within market expectations, although shipments fell from the same period in December.

The benchmark March palm oil contract on the Bursa Malaysia’s Derivatives Exchange rose 68 ringgit, or 3.5 per cent, to 1,988 ringgit ($5570) per ton.

Other traded contracts rose between 60 ringgit and 86 ringgit. Overall volume was 9,469 lots of 25 tons each.

Malaysian crude palm oil stocks in December fell 11.98 per cent to 1,994,681 tons from a revised 2,266,156 tons in November, official crop agency Malaysian Palm Oil Board (MPOB) said on Monday.

A Reuters poll showed that stocks probably tumbled 13.3 per cent in December from a record the month before, as a low output cycle gathered pace and exports rose.

People were talking about 350,000-400,000 tons so they are actually closer to the higher side of the range, a Malaysian trader said.

Another trader said although exports are falling, the market is still hoping that end-

January palm oil stocks will decline further from the previous month, as production should also drop.

As long as end-month stocks decline from the preceding month, that will support prices, the second trader said.

In Indonesia, the world’s largest palm oil producer, the state marketing centre said it sold 6,000 tons of crude palm oil out of 7,000 tons it offered, at a top price of 6,528 rupiah ($0.59) per kg, up from 6,369 rupiah in Friday.

Producers in Medan — home to Belawan port, Indonesia’s key port for palm oil exports -- did not hold a palm oil tender on Monday.

Meanwhile, refiners in Jakarta sold refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at about 6,900 rupiah per kg, up from 6,750 rupiah per kg on Friday.

In the physical market, Malaysian palm oil for January deliveries was traded at 1,970-1.980 ringgit per ton in the southern region and at 1,965-1,980 ringgit a ton in the central region.—Reuters