KUALA LUMPUR, Oct 30: Malaysian crude palm oil futures closed higher on Monday, boosted by strong exports and concerns over the country's production, which is likely to decline due to holidays.
The market has gained nearly 7 per cent in the last two weeks as traders expect Malaysia's palm oil stocks to fall from a record 1.799 million tons at the end of September following impressive exports and a reduction in output due to religious holidays last week.
There is a lot of short covering going on in the market said one dealer. Everyone is very bullish on palm oil as production is going to go down and demand from the overseas markets is very good.
Palm oil often tracks crude oil prices, driven by rapid growth in the global bio fuel industry based on vegetable oils, which are seen as a cheaper option to fossil fuels.
In the physical crude palm oil market, December shipment was quoted at 1,680/1,690 ringgit a ton. Trades were done at 1,680 ringgit a ton.—Reuters
