13 November 2001 (Business Times) - IMPROVING exports and declining outputare expected to continue to bolster palm oil prices, with traders sayingthe RM1,200 a tonne resistance level, a three-month high, will likely bebreached within the next two weeks.Favourable numbers released by the Malaysian Palm Oil Board yesterdayenergised trading on the Malaysian Derivatives Exchange (MDEX) with theactive month January crude palm oil (CPO) futures gaining RM40 to RM1,160a tonne.Things should stay bullish until early next year at least, said traders,who pointed to the strong uptrend in exports coupled with an expecteddecline in production due to the current wet spell as well as the upcomingfasting month ahead of Hari Raya.�With such fantastic figures (for the month of October), I don�t seeprices falling back to the RM900 level for several months at least,� atrader said.MDEX CPO futures contracts were firmer across the board. November andDecember rose RM38 each to RM1,128 and RM1,142, respectively. Volume was aheavy 4,250 lots.MPOB, the palm oil sector regulator and watchdog, said palm oil exportssurged 37.87 per cent in October to 898,918 tonnes, from 652,020 tonnes inthe previous month.In October 2000, one million tonnes of the commodity was exported, andthis is likely to be matched this month, said industry observers, based oncargo surveyor Societe Generale de Surveillance�s report that, in thefirst 10 days of November, 383,871 tonnes had already been shipped out, upfrom 257,879 tonnes in the same period last month.Output rose 3.66 per cent to 1.14 million tonnes in October from 1.10million tonnes a month earlier, but was marginally down from 1.18 milliontonnes in October 2000.End-October stocks meanwhile stood at 1.34 million tonnes, up 9.8 per centfrom 1.22 million tonnes at end-September, and down from 1.41 milliontonnes a year earlier.�The trend is positive... the current low production months brought aboutby the monsoon season have yet to run its course,� a trader said.Poor Argentine and Brazilian harvests in rapeseed and sunflower seed havealso tipped the scale in the favour of palm oil and soyaoil, he said.�But cheaper soyaoil is not posing too much of a problem... keytraditional buyers like India, Pakistan, Egypt, Bangladesh and China willcontinue to upload palm oil from Malaysia and Indonesia which are nearerto them than the US or Brazil.�He noted that the MPOB figures are brighter than private forecaster IvanWong�s estimates. Wong had said October output would reach 1.16 milliontonnes.Another trader said things are indeed looking up for the industry.�China�s formal entry into the World Trade Organisation will double itsannual vegetable oils import quota to 2.4 million tonnes for next year,from the current 1.2 million tonnes,� he said.Then there are the upcoming festive seasons like Deepavali and Hari Raya,along with increased demand for the commodity under the United Nation�said programme for Afghan refugees in Pakistan.�India�s move to cut import duty of CPO to 65 per cent, from 75 per cent,and Malaysia�s decision to allow duty-free palm oil exports of up to 1.3million tonnes in 2002 also brought cheer to the industry,� he said.Primary Industries Minister Datuk Seri Dr Lim Keng Yaik had announced theplan last Friday. For this year, the duty-free export quota was onemillion tonnes.Malaysia is the world�s biggest producer and exporter of palm oil. It sold10.38 million tonnes of the commodity worth RM12.47 billion last year,compared to 8.32 million tonnes worth RM9.4 billion in 1996.