KUALA LUMPUR, Dec 30 ― Palm oil climbed for a ninth day to head for the longest run of gains in more than a decade as flooding in Malaysia hurt prospects for harvesting, compounding a seasonal slowdown in production in the largest grower after Indonesia.

The contract for March delivery rose as much as 0.8 per cent to RM2,305 a metric tonne on Bursa Malaysia Derivatives and traded at RM2,299 at 11.48am in Kuala Lumpur. A ninth day of rising prices would be the longest run since June 2002, according to data compiled by Bloomberg. Palm oil climbed to 2,308 yesterday, the highest level since November 4.

The heavy rains that flooded parts of Malaysia over the past two weeks will continue for at least another week, risking disruption to the palm oil harvest, Commodity Weather Group forecast yesterday. Malaysia evacuated more than 200,000 people as of yesterday after the worst flooding in decades left at least 10 people dead. The downpours also hurt rubber supplies from Thailand, which borders Malaysia, and boosted prices.

“Key growing areas are inundated,” said David Ng, a Kuala Lumpur-based derivatives specialist at Phillip Futures Sdn. “Delayed harvesting activities and seasonally lower production will hamper yield levels in coming weeks.”

Output in Malaysia typically drops in the fourth quarter and initial months of the year, usually bottoming in January or February. Production may contract 11 per cent in December, in line with seasonal patterns, while reserves may fall 4 per cent, Alan Lim, an analyst at Kenanga Investment Bank Bhd, said in a report today. Declining inventory should support prices as it reflects stable demand against lower supply, Lim said.

Pahang hit

The number of people evacuated due to the floods in Pahang rose to 49,369 from 35,501, The Star newspaper reported on its website today. The state is Malaysia’s fourth-largest palm oil producer, according to official data.

Soybean oil rose 0.3 per cent to 33.03 cents a pound on the Chicago Board of Trade, while soybeans climbed 0.4 per cent to US$10.5325 (RM36.8638) a bushel. Soybean oil’s premium over palm was US$72.17 a tonne today compared with the 2013 average of about US$244, according to data compiled by Bloomberg.

The flood-induced rally puts palm oil futures on course for the first quarterly advance since the final three months of 2013. Prices climbed 3.7 per cent since the end of September, paring their decline this year to 13 per cent.

Rubber for June delivery gained for a fourth day, rising as much as 2.9 per cent to 211.4 yen a kilogram on the Tokyo Commodity Exchange, the highest level for most-active contract since August 1.

“Bad weather in Malaysia and Thailand boosted concern that supply may tighten,” Gu Jiong, analyst at commodity broker Yutaka Shoji, said by phone from Tokyo, referring to rubber. Thailand is the world’s largest shipper. ― Bloomberg