(March 16): Malaysian palm oil futures recovered losses from early trade and nudged higher on Wednesday due to expectations of lower output growth from a crop damaging El Nino.
Industry experts at a conference in Kuala Lumpur last week had forecast El Nino's dry weather effects to lower global palm production by 2–3 million tonnes, potentially pushing benchmark prices up to range between RM2,700–RM3,000 a tonne by June.
Palm had earlier suffered its steepest drop in two weeks, tracking declines in rival vegetable oils and feeling the pressure of slowing demand, while traders booked profits.
The palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange rose 0.04% to reach RM2,611 (US$631) per tonne at the end of the trading day. It reached a one-month high of RM2,632 earlier this week on Monday.
Trade volumes were 47,226 lots of 25 tonnes each on Wednesday at the close of trade.
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