KUALA LUMPUR: Malaysian palm oil futures fell on Friday as expectation of higher output cut short a rally that had lifted prices to a six-day peak earlier in the session.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange fell 0.73 per cent to 2,185 ringgit ($538.18) a tonne at the end of the week, having touched an intra-day high of 2,210 ringgit.

“The market was cashing out profit,” one Kuala Lumpur-based trader said. The benchmark gained 2.3pc in the previous two days after hitting its lowest level since September 2015. “Fundamentally, we knew production would pick up, while there won’t be much improvement expected on the demand side.” Trading volume totalled 40,089 lots of 25 tonnes each at noon.

Exports of palm oil products from Indonesia, the world’s biggest exporter, rose 7.5pc in June from a year earlier, Indonesia’s palm oil association (GAPKI) said on Friday. Despite the shipment increase from Indonesia in June, palm stock remain high at 4.85 million tonnes by the end of last month.

Published in Dawn, July 28th, 2018