Palm Resumes Rally on Rising Demand Hope

MALAYSIAN crude palm oil futures rose 0.6 per cent by midday today, boosted by hopes of a recovery in demand in coming months, traders said. Traders said investors are less concerned about the high inventory levels and kept betting on demand prospects as exports continued to rise and production may dip due to rainy weather. Exports of Malaysian palm oil products for Nov 1-20 rose 14.53 per cent to 930,133 tonnes from 812,095 tonnes shipped between Oct 1 and 20, cargo surveyor Intertek Testing Services said earlier today. “People are anticipating good export numbers for coming months because eventually buyers need to buy and hedge their positions,” said a trader at a Kuala Lumpur-based brokerage.

The thin volume, however, reflects the fact some people are reluctant to build up their positions, and prefer to wait for clearer signs as to whether or not production has been cut by rains and floods. “I personally would rather…do nothing. If I want to do something, I will do it when I am very sure,” the trader said, adding that production could still surprise on the upside. The benchmark February contract Bursa Malaysia Derivatives Exchange settled up RM14 to RM2,385 (US$703.33) per tonne. Overall volume was at 4,683 lots of 25 tonnes each, compared to the usual 5,000 lots. Source : Business Times
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