The contract for delivery in June advanced as much as 1.8 per cent to RM2,580 a metric ton on the Malaysia Derivatives Exchange, and closed at RM2,577. The price ended last week at RM2,649.
Palm oil output in Malaysia, the second-largest producer, may decline between 2 and 3 per cent this year, as El Nino cuts yields, said Boon Weng Siew, president of the Malaysian Estate Owners Association, which represents small and medium-sized growers. The nation produced 17.6 million tons last year.
Dry weather was forecast to persist in Sabah, Malaysia’s largest palm-oil-producing region, and other parts of the country through to May, the Meteorological Department said on March 12.
The state accounted for 35 per cent of Malaysia’s output in the first two months of the year, according to data from the country’s Palm Oil Board.
El Nino, which reduces rainfall in Asia, may cause Malaysia to miss a government output forecast for palm oil of 18.1 million tons, Dorab Mistry, a director at Godrej International Ltd, one of India’s biggest vegetable oil buyers, said March 9. Output this year may be 17.2 million tons, Mistry said.
Prices may rise to as much as RM3,300 in the first half of the year amid the drop in supply, Anne Frick, vice president for research at Prudential Bache Commodities LLC, said on March 8.
The commodity may touch RM3,200 in the second half, Mistry said the following day.
Still, producers in Indonesia and Malaysia tracked by OCBC Investment Research Pte Ltd may post higher output this month as the dry weather’s impact on yields won’t be felt until six months later, Carey Wong, an analyst at the bank, said by phone today. Wong didn’t identify producers.
PRICES on the Malaysian rubber market closed lower yesterday due to lack of demand, dealers said.
"There were some enquiries from Korea," one of the dealers said, adding that the strengthening ringgit was dampening sentiment to some extent.
At noon, the Malaysia Rubber Board's official physical price for tyre-grade SMR 20 ended 1 sen lower at 1,035.5 sen per kg while latex-in-bulk dropped 1.5 sen to 738 sen per kg.
The unofficial closing price for tyre-grade SMR 20 was 2 sen higher at 1,036.5 sen per kg while latex-in-bulk declined 2.5 sen to 736.5 sen per kg.
THE price on the Kuala Lumpur Tin Market (KLTM) closed unchanged yesterday at US$17,580 per tonne on cautious sentiment, said a dealer.
"Traders were cautious as other metal prices were down on the London Metal Exchange (LME)," he said.
The LME however, saw the price of tin, rise by US$45 to US$17,795 per tonne.
At the opening bell, bids stood at 60 tonnes while offers amounted to only 56 tonnes with the market dominated by Japanese, European and local traders.
Turnover slipped to 56 tonnes against the 85 tonnes on Thursday while the premium between the KLTM and the LME narrowed to US$140 per tonne. - Agencies