KUALA LUMPUR: Malaysian palm oil futures recovered ground on Monday after earlier hitting a five-and-a-half month low, as industry association data showing shrinking output eased concerns over high inventories and rising production.
The market had fallen earlier on concerns over the US-China trade war and expectations of rising output in the coming months.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was last up 0.1pc at 1,985 ringgit ($476.93) a tonne at the close of trade on Monday, snapping three previous sessions of losses.
The market earlier fell as much as 1.2pc to 1,960 ringgit, its lowest levels since Nov 27.
“The market recovered losses due to the Southern Peninsular Palm Oil Millers Association data,” said a Kuala Lumpur-based trader, noting the data showed declining output during the first 10 days of May versus the corresponding period last month.
Another trader had said earlier in the day that the occurrence of Ramazan could curb output in May as well.
This slows down productivity in oil palm estates, as many workers are from Muslim-majority Indonesia and work in plantation estates is labour-intensive.
Published in Dawn, May 14th, 2019