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Malaysia palm oil ends higher on covering

KUALA LUMPUR: Malaysian palm oil futures closed higher on Friday, boosted by short-covering and strong gains in Chicago soyoil futures overnight.

Traders also attributed the rise to technical bounce to recent losses.

The third position March palm oil futures contract ended up 28 ringgit at 1,150 ringgit ($302.63) a tonne.

"Short-covering continued in the afternoon, but the market was largely helped by overnight gains in CBOT soyoil," said a trader. "It was partly a technical rebound."

Prices had fallen over five percent since India, a major buyer of Malaysian palm olein, raised the import duty on refined edible oils to 27.5 percent from 16.5 percent two weeks ago. Such an increase could curb Indian demand for vegetable oils.

Concerns over slow export demand could limit further gains, traders said.

The market is awaiting Malaysian palm oil exports data for the first half of January from cargo surveyor SGS due on Monday.

Traders said unofficial figures from cargo surveyor Caleb Brett showed Malaysian palm oil exports for the first 10 days of January at about 146,000 tonnes. By comparison, Malaysia exported nearly 950,000 tonnes of palm oil in December.

Soyoil futures at the Chicago Board of Trade jumped sharply on Thursday, reaching three-week highs as a reduced US supply outlook and the potential for lower South American supplies kept the soy complex climbing.

Physical palm oil prices also strengthened on covering by refiners, traders said.

Jan/Feb (south) crude palm oil was offered at 1,175 ringgit a tonne against bids at 1,170. It traded from 1,160 to 1,170.

Among refined products, Jan/Feb/Mar RBD palm oil was offered at $332.50 a tonne FOB.

Jan and Feb/Mar RBD palm olein saw offers at $352.50 and Apr/May/Jun at $355.

Jan and Feb/Mar RBD palm stearin were offered at $255, and Jan palm fatty acid distillate at $175.-Reuters