KUALA LUMPUR: Malaysian palm oil futures gave up early gains to end lower on Wednesday after a growers’ group unexpectedly forecast February yields to pick up.

Sentiment was further dampened by weak export data and a stronger ringgit.

The Malaysian Palm Oil Association estimates that crude palm oil production from Feb 1-20 rose 4.5 per cent in Malaysia, the second biggest producer, as weaker yields in the Borneo region were offset by a recovery in Peninsular Malaysian estates.

Market players had expected output to drop up to 12pc for the whole month. Official data is due on March 10. The benchmark May contract on the Bursa Malaysia Derivatives Exchange dropped 0.5pc to 2,246 ringgit ($623) per tonne by Wednesday’s close. Trading was choppy between 2,242 ringgit and 2,276 ringgit.

Traded volume on Wednesday stood at 51,476 lots of 25 tonnes each, much higher than the usual 35,000 lots. Traders said sentiment was uncertain, with most looking to an industry meeting in Kuala Lumpur next week for more clarity on the global market scene.

Published in Dawn February 26th , 2015

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