Malaysian palm oil marks rise

KUALA LUMPUR, Nov 25 (Reuters):  Malaysian palm oil futures rose on Tuesday, pulling away from a near one-month low as jitters about a projected increase in crude palm oil production in November faded in the second half of the session.
The benchmark February contract on the Bursa Malaysia Derivatives Exchange closed 0.5 per cent higher at 2,218 ringgit ($662) per tonne, recovering from an Oct. 28 low of 2,187 ringgit hit in early trade.
The Malaysian Palm Oil Association, a group of growers in the second-largest producer, forecast that palm oil output rose 2.4 per cent between Nov. 1-20 compared with a month ago, lifted by a 9 per cent increase in yields in the Borneo state of Sabah.
"People thought full month palm oil production would be 7-10 per cent down in November, but when they saw the 20 days projection was up 2.1 per cent, that surprised the market and some panic selling came in," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"But that stabilised in the second half and people became a bit immune to that news, so prices began to move higher."
Tepid export demand, however, capped the rise in palm prices. Shipments of Malaysian palm oil products for Nov. 1-25 fell 2.9 per cent to 1,102,724 tonnes from a month ago, according to cargo surveyor Intertek Testing Services.
Another cargo surveyor Societe Generale de Surveillance reported that exports for the same period fell 3.3 per cent.
A Singapore-based palm trader said export demand would likely remain weak for the rest of November.
Total traded volume for crude palm oil futures on the Bursa Malaysia Derivatives Exchange stood at 46,234 lots of 25 tonnes on Tuesday, much higher than the usual 35,000 lots.     
A third day of gains for the Malaysian ringgit, which rose a further 0.1 per cent to 3.3485 per dollar on Tuesday, also limited gains for ringgit-priced palm oil.
A prolonged fall in palm prices, down 17 per cent this year, is hitting Indonesia's smallholder farmers, which account for about 40 per cent of output from the world's No.1 grower, forcing cutbacks that may reduce supply in the coming years.
In other markets, Brent crude oil prices steadied under $80 a barrel on Tuesday ahead of a meeting of OPEC oil producers to decide on oil production levels for next year.        
In other competing vegetable oil markets, the U.S. soyoil contract for December fell 0.5 per cent in late Asian trade, while the most active May soybean oil contract on the Dalian Commodities Exchange rose 0.1 per cent.