(March 17): Malaysian palm oil futures on Thursday registered their biggest gains so far this week, bolstered by concerns over weak output caused by El Nino-related dryness.
The palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange gained 1.7% to close the trading day at RM2,654 (US$654) per tonne.
It earlier hit an intraday high of RM2,657, its loftiest since April 2014.
Trade volumes were 62,763 lots of 25 tonnes each at the end of the day, compared with 47,226 lots the day before.
"The ringgit is so strong, but we are still going up on concerns (about the) production line," a trader based in Kuala Lumpur said.
"Weather patterns could affect production ... There is fear building up in people. Other oils are also up, so palm is marginally held by that."
A crop-damaging El Nino is forecast to lower global palm oil production by 2–3 million tonnes this year, according to leading industry analysts.
The weather phenomenon brings scorching heat across Southeast Asia, impacting palm's fresh fruit yields and lowering production.
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