KUALA LUMPUR: Malaysian palm oil futures rose to a near two-year high on Monday, fuelled by an unexpected drop in the country’s production in October and a jump in exports.

The benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange rose 55 ringgit, or 2.1 per cent, to 2,628 ringgit ($635.09) per tonne by the end of the trading session. The market surged to its highest since November 20, 2017 at 2,657 ringgit a tonne in the afternoon session.

“Big buyers are cornering supplies and the data is supportive for the bullish sentiment,” said one Singapore-based trader who ships palm oil to India.

Crude palm oil is quoted at $635 a tonne, including cost and freight (C&F), to India, up from $600 a tonne at the end of October, he added. Malaysia’s palm oil stockpiles stood at 2.3 million tonnes at the end of October, down 4.1pc from the previous month, industry regulator the Malaysian Palm Oil Board (MPOB) said on Monday.

October output in the world’s second-largest palm producer was down 2.5pc at 1.8m tonnes from the previous month, while exports were up 16.4pc from September, at 1.6m tonnes, MPOB data showed. This compared with prediction of a 2pc rise in Malaysian palm oil output in October to 1.88m tonnes, according to a Reuters poll.

Exports of Malaysian palm oil products for November 1-10 rose 12.3pc to 414,020 tonnes from 368,737 tonnes shipped during October 1-10, independent inspection company AmSpec Agri Malaysia said on Sunday.

Published in Dawn, November 12th, 2019