After increasing to their highest prices in almost three years, palm oil futures took a dip on Tuesday, likely because of investors attempting to capitalize on those high prices, Bloomberg reports.
Palm oil for February delivery dipped 1.1 percent to 3,680 ringgit ($1,177) per metric ton after striking 3,766 ringgit ($1,150) on Tuesday, which was the commodity's highest value since March 2008. The commodity has soared 38 percent thus far this year, en route to a second straight year of gains.
Tuesday's slip in price "could be due to profit-taking activities as some investors cashed in after a record rally," Ker Chung Yang, an analyst at Phillip Futures, told Bloomberg.
Inclement weather in Indonesia and Malaysia is expected to negatively impact oil palm yields, which have suffered because of dry conditions caused by El Niño and heavy rainfall generated by La Niña.
"The market is factoring in the fact that we will still have a rather poor production in the first half of next year," Alvin Tai, an analyst at OSK Research, told Bloomberg.
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