Palm rises 3% on lower production

December 6, 2021: Malaysian palm oil futures jumped 3% on Monday as industry surveys ahead of official data pegged a decline in November stockpile, and after top analysts forecast production to remain weak in the coming months.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange rose 142 ringgit, or 3.05%, to 4,792 ringgit a tonne in early trade, heading for its biggest daily gain since Oct. 13.

Malaysia's palm oil stockpile in November likely fell 6.2% from the month before to 1.72 million tonnes due to a surge in exports while production declined slightly, Ivy Ng, regional head of plantations research at CGS-CIMB Research, said in a note.

The Malaysian Palm Oil Board is scheduled to release November supply and demand data on Friday.

Palm oil production will likely remain soft until at least the first half of 2022, which would continue to provide a cushion for prices in the coming months, despite the caution of reaching peaks, top industry analysts said on Thursday.

Dalian's most-active soyoil contract rose 3.2%, while its palm oil contract gained 3.1%. Soyoil prices on the Chicago Board of Trade were up 0.6%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Palm oil is expected to bounce in the 4,751-4,812 ringgit range, as it has completed a fall from 5,069 ringgit around key support at 4,555 ringgit per tonne, Reuters technical analyst Wang Tao said.

Reuters

Posted on: 2021-12-06T09:26:26+05:00

29410