KUALA LUMPUR: Malaysian palm oil futures notched up their biggest daily gain in nearly five months on Friday, rising over 2 per cent on a technical rebound and expectations that production will decline this month.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange was up 2.7pc at 2,518 ringgit ($618) at the close of trade, its first gain in three sessions and its sharpest rise since July 25. It earlier hit an intraday high of 2,525 ringgit, its highest level in a week, and rose 1.6pc on the week after six consecutive weekly falls. Palm oil, however, hit its lowest since August 2016 on Thursday due to high inventories and low demand, and has shed 3.3pc so far this month after declining 7.5pc in November.

Trading volumes totalled 64,331 lots of 25 tonnes each on Friday.

“The market is seeing a technical rebound after a sharp drop, it looks like yesterday it reached its bottom,” said a futures trader in Kuala Lumpur. “The market may start moving higher from now, as all negative factors are priced in.”

Published in Dawn, December 16th, 2017