Crude palm oil futures rose 1 per cent yesterday on fears monsoon rains would hurt production this month as well as expectations of rising exports. High stock levels have weighed on the market but traders now say heavy rains in key oil palm growing states in mainland Malaysia and Borneo island will slow production by 25 per cent and spur buyers to snap up cargoes before prices start climbing. The world’s second-largest palm oil producer is in its monsoon season, bringing floods to much of the mainland’ southern and eastern states. Sabah on Borneo island, another major palm oil producing state, is also experiencing heavy rains. The benchmark January contract on Bursa Malaysia Derivatives Exchange rose RM23 to RM2,268 ringgit per tonne. “Demand is still good even if the stocks weigh on prices,” said a trader with a local commodities brokerage. “Overseas buyers are in the market because they fear the heavy rains will tighten supply and boost prices.” Traders are expecting cargo surveyors to report up to 650,000 tonnes of palm oil exports from Malaysia for the first 15 days in November due to fears that the quality of palm oil will fall due to the rains. That represents a 10 per cent jump from Oct 1-15 exports as reported by cargo surveyor Societe Generale de Surveillance (SGS). Both SGS and Intertek Testing Services will unveil Nov. 1-15 palm oil exports on Monday.
Crude palm oil futures rose 1 per cent yesterday on fears monsoon rains would hurt production this month as well as expectations of rising exports. High stock levels have weighed on the market but traders now say heavy rains in key oil palm growing states in mainland Malaysia and Borneo island will slow production by 25 per cent and spur buyers to snap up cargoes before prices start climbing. The world’s second-largest palm oil producer is in its monsoon season, bringing floods to much of the mainland’ southern and eastern states. Sabah on Borneo island, another major palm oil producing state, is also experiencing heavy rains. The benchmark January contract on Bursa Malaysia Derivatives Exchange rose RM23 to RM2,268 ringgit per tonne. “Demand is still good even if the stocks weigh on prices,” said a trader with a local commodities brokerage. “Overseas buyers are in the market because they fear the heavy rains will tighten supply and boost prices.” Traders are expecting cargo surveyors to report up to 650,000 tonnes of palm oil exports from Malaysia for the first 15 days in November due to fears that the quality of palm oil will fall due to the rains. That represents a 10 per cent jump from Oct 1-15 exports as reported by cargo surveyor Societe Generale de Surveillance (SGS). Both SGS and Intertek Testing Services will unveil Nov. 1-15 palm oil exports on Monday. Source : Business Times