Vegoils Palm oil gains to new 20-month high on lower output

by **Cals** Thu 04 Feb 2016, 08:06

Vegoils

[size=28]Palm oil gains to new 20-month high on lower output

By Reuters / Reuters | February 3, 2016 : 6:30 PM MYT
KUALA LUMPUR (Feb 3): Malaysian palm oil futures rose for a second trading day to reach a new 20-month high on Wednesday as traders forecast lower palm oil output in February due to the Lunar New Year public holidays.

The palm oil contract for April on the Bursa Malaysia Derivatives Exchange had gained 1.3% to RM2,547 (US$603.70) per tonne at the end of Wednesday. It earlier reached an intraday high of RM2,551, its strongest level since May 19, 2014.

Traded volume stood at 60,141 lots of 25 tonnes each.

"Production was down last month and this month is expected to be down again," said a trader from a palm oil brokerage in Kuala Lumpur.

"There is Chinese New Year, so there are fewer harvesting days, coupled with other public holidays plus fewer calendar days in February."

Palm oil output in top producers Malaysia and Indonesia is seeing a decline in line with the seasonal trend, and as the dry weather impact from the El Nino last year kicks in.

A weaker ringgit on Wednesday could have also lent support to palm, as this makes the vegetable oil cheaper for holders of foreign currencies.

The ringgit, the currency palm is traded in, lost 0.3% to reach 4.2190 per dollar on Wednesday as investors weigh in concerns over falling oil prices and allegations surrounding Malaysia's debt-laden state fund 1Malaysia Development Bhd (1MDB).

In competing vegetable oil markets, the US March soyoil contract gained 0.6%, while the May soybean oil contract on the Dalian Commodity Exchange rose 0.3%.

Palm, soy and crude oil prices at 1013 GMT

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Contract	Month	Last	Change	Low	High	Volume
MY PALM OIL	FEB6	2455	+23.00	2438	2459	427
MY PALM OIL	MAR6	2506	+23.00	2474	2508	4414
MY PALM OIL	APR6	2547	+32.00	2507	2551	28753
CHINA PALM OLEIN	MAY6	4768	+30.00	4738	4784	700608
CHINA SOYOIL	MAY6	5642	+18.00	5608	5662	337542
CBOT SOY OIL	MAR6	30.98	+2.80	30.70	30.99	4169
INDIA PALM OIL	FEB6	456.40	+2.80	454.50	456.90	937
INDIA SOYOIL	FEB6	618.80	-0.75	617.50	621.70	23970
NYMEX CRUDE	MAR6	30.31	+0.43	29.40	30.60	66052

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Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in US cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in US dollars per barrel

(US$1 = RM4.2190)
(US$1 = 68.1500 Indian rupees)
(US$1 = 6.5770 Chinese yuan)
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