Palm oil rallies to eight year high on output outlook

Rising palm oil prices indicate that demand is higher than supply.

KUALA LUMPUR: Crude palm oil climbed to an eight-year high of RM3,262 per tonne on Friday on concern that a labour shortage in Malaysia will hamper output at a time when dry weather is threatening soybean crops in South America.

Expectations about a drop in palm and sunflower crops, lower soybean ending stockpiles in the U.S. and a dry weather in Brazil are offering a bullish outlook for edible oil prices, said Sathia Varqa, owner of Palm Oil Analytics in Singapore. “A weaker dollar is also moving soybeans higher, ” he said.