KUALA LUMPUR: Malaysian palm oil futures reversed earlier losses to close over 2 per cent higher on Monday, as official data showed falling output for the first time in five months.
Data from industry regulator the Malaysian Palm Oil Board (MPOB) showed stocks last month rose 10.5pc from October to 3.007 million tonnes, while production in November slid 6.09pc from the previous month to 1.85m tonnes.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange was up 2.2pc to 2,042 ringgit ($490.39) a tonne at the close of trade, its strongest daily gains since Nov 28.
Palm earlier hit a one week high of 2,049 ringgit. Trading volumes stood at 34,798 lots of 25 tonnes each for the day.
“The 3m stocks has been factored in and now production was down 6pc,” said a Singapore based trader, referring to the MPOB data.
“The seasonal slowdown in production will start now.”
Palm oil production typically falls in line with seasonal trend at the year end, helping to reduce inventory levels.
Published in Dawn, December 11th, 2018
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