Palm oil at 2-month high on rain worries

KUALA LUMPUR: Palm oil advanced to the highest level in two months on speculation that rainfall and flooding may hamper harvesting in Malaysia, helping to draw down record stockpiles in the second-largest producer.

The contract for March delivery jumped 2.6% to 2,501 ringgit ($824) a tonne on the Malaysia Derivatives Exchange, the highest settlement price for the most-active contract since November 1.

Futures lost 23% last year. A so-called heavy-rain warning was issued on December 31 for several districts in Terengganu and Pahang, according to a statement from the Malaysian Meteorological Department.

The two states accounted for about 18% of the country's total crude palm oil output from January to November last year.