KUALA LUMPUR: Malaysian palm oil futures closed marginally up on Tuesday, reversing early losses on bargain buying, but gains were capped by worries of a disruption to export shipments in case of an escalation in Middle East tensions.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange closed up 5 ringgit, or 0.2 per cent, at 3,047 ringgit ($744.81). Palm oil had traded down for two straight sessions, easing from a near three-year high of 3,149 ringgit hit on Friday.

“Lower Dalian and higher ringgit kept the market depressed at opening, but a rebound in the equity markets from bargain buying helped reverse losses,” said Sathia Varqa, owner and co-founder of Singapore-based Palm Oil Analytics.

Tensions between the United States and Iran have weighed on equity markets and some commodity markets in Malaysia. The markets remain nervous as a war in the Middle East could disrupt shipment routes and drive up freight charges, traders said.

Losses were limited by forecasts of lower stockpiles and production in December. Malaysia’s palm oil stockpiles likely fell 8.5pc from November to 2.06 million tonnes, the lowest in 27 months, a Reuters survey showed on Sunday.

Published in Dawn, January 8th, 2020