Malaysian crude palm futures ended up 3.2 per cent yesterday but came off week highs.
Some investors bought on advancing crude and equity markets and expectations of a sharp decline in domestic inventories also pushed the market higher, traders said.
Palm oil, used in chocolates to biofuels, have steadily climbed more than a third on weakening production and expectations of spillover demand as drought in Argentina tightens supply of competing soyaoil.
The benchmark April contract settled up RM57 to RM1,845, after going as high as RM1,852, a level unseen since Jan. 23.
Other traded contracts rose between RM23 and RM81 while overall volume stood at 11,238 lots of 25 tonnes each.
Traders said January production fell 17 per cent to 1.22 million tonnes from 1.48 million in Dec.
“Given China plant closures in January for Chinese New Year, (palm oil) stocks will likely remain flat or fall slightly (in January) but the decline will be more pronounced from February,” BNP Paribas analyst Michael Greenall said in a note.
In the Malaysian physical market, palm oil for Feb. shipment was quoted at RM1,850-RM1,860 per tonne in the southern region. Trades were done between RM1,830 and RM1,850 ringgit. - Reuters
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