Palm oil rises on anticipation of lower output, short covering

Malaysian palm oil futures rose on Tuesday, driven by expectations of weaker production and short-covering activity. The benchmark palm oil contract FCPO1! for March delivery on the Bursa Malaysia Derivatives Exchange gained 24 ringgit, or 0.59%, to 4,071 ringgit ($1,006.43) a metric ton at the close. On Monday, the contract snapped a four-session winning run. The market recovered on signs the December output could be lower as more widespread rains are expected to fall in East Malaysia, specifically in the state of Sarawak, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari. The Malaysian Meteorological Department said on Monday a monsoon surge from January 1 to 5 has the potential to bring heavy rain in Sarawak, as well as strong winds and rough seas in the South China Sea. “We are also seeing short-covering activities today ahead of the holidays,” Supramaniam said. However, Supramaniam said the tapering demand, strength in the ringgit and ...