Palm oil closed at its highest level since late July on concerns that dry weather and aging
trees will hurt production in Indonesia. Output in the world’s biggest palm grower
is expected to be flat or as much as 5% lower from a year earlier, according to forecasts
from the Indonesian Palm Oil Association and the Indonesian Palm Oil Board. The industry
groups, which represent producers and refiners, had predicted a rise earlier this year.
Palm has responded to reports that Indonesia’s production may be lower than earlier
projections, said a trader. The market is also getting support from stronger prices of
soybean oil, the tropical commodity’s closest food and fuel substitute, according to a
trader. In addition, the gains were supported by lower production outlook in the short term,
he said. (Source: Bloomberg)
