Open interest on palm oil futures soars as industry, specs bet

Reuters

* Open interest hits record high of 340,613 lots

* Planters, refiners hedge on Malaysian futures

* Spreads widen between palm oil, rival products

SINGAPORE, Sept 12 (Reuters) - The volume of open positions in Malaysian palm oil futures jumped to a record high this week, suggesting the market may be bottoming out after falling to its lowest price in more than five years.

Palm oil, which has lost almost a quarter of its value this year, dropped to 1,914 ringgit ($598) a tonne last week, the lowest since March, 2009, on expectations of near-record world vegetable oil supplies and slowing demand.

But prices have since rebounded to above 2,050 ringgit after the Malaysian government scrapped export taxes on the oil for September and October in a bid to boost shipments and curb rising stockpiles.

The tax cut also triggered a wave of ownership transfer and position shuffling, with open interest on the Bursa Malaysia Derivatives Exchange climbing to an all-time high of 287,859 contracts on Wednesday and traded volume last week of nearly 70,000 lots, double the daily average. READ MORE...