KUALA LUMPUR: Malaysian palm oil futures touched an almost three-year high and extended their winning streak on Monday supported by forecasts of a steeper-than-expected seasonal decline and a push for higher palm oil levels in biodiesel in Indonesia and Malaysia. The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange closed up 55 ringgit, or 1.79 per cent, at 3,128 ringgit ($762.09) after falling 0.7pc in early trade. Palm hit an intraday high of 3,140 ringgit, its highest since Jan 25, 2017. Palm prices are up at least 47pc this year and on track for their biggest yearly gain since 2009.

“The market is waiting for the full December production and export numbers, and India palm oil duty changes in line with the ASEAN agreement,” said Anilkumar Bagani, research head at Sunvin Group, a Mumbai-based vegetable oil broker. Palm oil surpassed the 3,000 ringgit mark for the first time in nearly three years last week on lower-than-expected forecasts of December production in Malaysia.

The Malaysian Palm Oil Association and the Southern Peninsular Palm Oil Millers Association forecast month-on-month falls in production of 16pc and 27pc respectively, traders said. Yield is expected to be lower in the first half of 2020 due to poor rainfall and lower fertiliser usage in top producers Malaysia and Indonesia earlier this year, traders and analysts said.

Capping gains was slowing demand, as exports of Malaysian palm oil products for December 1-25 fell by between 8.5pc and 12.8pc from a month earlier, according to cargo surveyors.

Published in Dawn, December 31st, 2019