KUALA LUMPUR, Dec 28: Malaysian palm oil futures closed 2.2 per cent higher on Thursday to hit fresh eight-year highs as overnight rains in several parts of the country raised fresh concerns over supply.

The benchmark third-month March contract on the Bursa Malaysia Derivatives exchange finished up 43 ringgit at 2,032 ringgit ($575) a ton, the highest since January 1999.

We are worried about output, there have been rains in other parts and the situation has not improved much in Johor, one dealer said.

Other traded contracts were up between 31 and 58 ringgit. Overall volumes surged to 26,117 lots of 25 tons each from 10,000 to 12,000 lots traded on a routine day.

Malaysian palm oil futures jumped 5 per cent on Tuesday, boosted by fears that floods in southern Johor state would cut supplies. The market has gained more than 42 per cent this year.

The region has been hit by its heaviest rains in a century and the resultant flooding has forced about 60,000 people to flee their homes.

State-run Malaysian Palm Oil Board is due to release December palm oil production, exports and closing stocks data on Jan. 10. —Reuters