Palm oil edges up on slowing production outlook

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KUALA LUMPUR: Malaysian palm oil futures edged up in early trade on Wednesday, as expectations of lower production in December and easing weakness in export demand supported the market.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange rose 0.3 percent to 2,529 ringgit ($620.92) a tonne at the midday break.
Trading volumes stood at 12,487 lots of 25 tonnes each.
“This month, production will be down, but the question is how much,” said a Kuala Lumpur-based trader.
Malaysian palm oil shipments fell 2 percent on Dec. 1-20 compared with the same period last month, data from cargo surveyor Intertek Testing Services showed.
The fall compares with a steep 16.6 percent decline seen in the first ten days of December, against the same period in November.
“I think full-month exports for December can be positive,” another trader said.
In November, Malaysian palm oil exports fell 5.3 percent on-month, data from the Malaysian Palm Oil Board showed.
Demand for the tropical oil from key regions such as Europe and China usually falls at the end of the year, as colder weather in the northern hemisphere solidify palm oil.
In other related edible oils, the January soybean oil contract on the Chicago Board of Trade rose 0.3 percent, while the May soybean oil contract on the Dalian Commodity Exchange was down 0.1 percent.
The Dalian January palm olein contract was up 0.5 percent.
Palm oil prices are impacted by movements in other edible oils, as they compete for a share of the global vegetable oils market.