Business Recorder (10/12/2019) - Malaysian palm oil futures rallied for a fifth straight session on Monday and hit near 3-year high, on fears of a sharp fall in supply. The benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange closed 1.6% higher at 2,904 ringgit ($696.40), the highest price since Feb. 16, 2017.

A Reuters poll on Thursday forecast Malaysian palm oil production would show a 10% monthly fall in November, but traders said they now expect it to fall as much as 13%, driving prices higher.

Dry weather and lower fertiliser use, a move adopted by some growers to save costs, have affected output this year at top producers Indonesia and Malaysia, and will continue to be a factor in the coming years, industry analyst James Fry said last month.

Malaysian Palm Oil Board will release official data on Dec. 10. Palm oil continued to overtake soyaoil prices on the Chicago Board of Trade for the second straight session, and was last up 0.7% at $693.4 per tonne.

The last time palm oil was more expensive than soyaoil was in February 2011. Gains in rival oils on the Dalian Commodity Exchange also helped the rally in palm oil prices.

Dalian's January soyaoil contract last traded 1.4% higher, while its palm oil contract rose 3.1%. Rival oils on the Dalian exchange rallied on palm oil supply concerns in Malaysia and Indonesia, as well as soyaoil in Argentina, said Anilkumar Bagani, research head of Sunvin Group, a Mumbai-based vegetable oil broker.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.