January 06, 2007	Saturday	Zilhaj 15, 1427

KUALA LUMPUR, Jan 5: Malaysian palm oil futures rose more than 2 per cent on Friday, ending three straight days of decline on worries over expected heavy rainfall and technical buying.

The benchmark third-month March contract on the Bursa Malaysia Derivatives exchange finished up 42 ringgit at 1,961 ringgit ($559) a ton.

The country's central and northern states are forecast to receive heavy rainfall over the weekend, media reports quoted meteorological department officials as saying.

More rain might cause production problems. The market is reacting to the weather news, said one dealer. Also, it is technical buying because the market was in an oversold condition.” Other traded contracts closed up between 23 and 48 ringgit.

Overall volume stood at 19,720 lots of 25 tons each. The market has dropped more than 5 per cent in the last three trading days after touching an eight-year high of 2,032 ringgit last week because of floods in the southern part of Malaysia.

The region was hit last month by its heaviest rains in a century and the resultant flooding forced thousands of people to flee their homes, stirring doubts over palm oil supplies.

Dealers said the country's palm oil output was expected to have declined by 20 to 30 per cent in December due to the rains and floods, from 1.55 million tons produced in November.

In the physical palm oil market, January shipment in the southern region was quoted at 1,960/1,970 ringgit a ton and trades were done between 1,955 and 1,970 ringgit.

Exports of Malaysian palm oil products in December fell 12 per cent to 1,198,976 tons from 1,366,111 tons shipped in November, cargo surveyor Intertek Testing Services said.

Another cargo surveyor, Societe Generale de Surveillance, said exports during the period fell almost 13 per cent to 1,183,780 tons.—Reuters