"This is super bullish, phones are ringing as consumers are shocked by the numbers," said a trader. "Buying will definitely come in... a kneejerk reaction. The benchmark September contract
For a graphic on Malaysia's palm oildata for June, see: http://graphics.thomsonreuters.com/10/MY_PLMSTX0710.gif
Production rose 2.5 percent to 1.42 million tonnes in June, unexpectedly lower than market estimates for a six percent, as yields from key oil palm growing region of Sabah on Borneo Island were still lagging.
"El Nino has passed but the trees are still taking some time to recover," said a planter from Sabah state that accounts for about 25 percent of Malaysia's total production. El Nino-driven drier weather in early 2010 prolonged yield stress for oil palms after seasonally higher production in the last quarter of 2009.
But planters say higher temperatures then may have stunted female flowers that will produce oil palm fruits six months later in time for the seasonal output peak in October. June exports rose 1.44 million tonnes from May as India and China, the world's top palm oil buyers, started taking up more cargoes as prices declined slightly in June. Traders expect the export momentum to continue in July as cargo surveyor Intertek Testing Services reported a 9.1 percent increase in Malaysian shipments for the first ten days of this month.
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