March 14, 2007	Wednesday	Safar 24, 1428

BANGKOK, March 13: Malaysia palm oil futures closed higher on Tuesday despite expectations of rising supply as investors bought in anticipation of higher prices.

The benchmark third-month May contract on the BursaMalaysia Derivatives Exchange settled at 1,977 ringgit ($564) per ton, up 5 ringgit from Monday's close at 1,972 ringgit.

But trading was not busy with overall volume at 2,732 lots compared with normal daily turnover of 5,000 lots. Players took long positions as the market factored in the expectation of higher prices, a Malaysian trader said.

The Bursa Malaysia is holding a three-day industry conference in Kuala Lumpur at which leading figures said they expected prices to rise in the first half of this year despite higher output.

Malysia's crude palm oil ouput is expected to reach 16.5 million tons in 2007, up from 15.9 million tons in the previous year, Malaysian Commodities Minister Peter Chin said.

But crude palm oil prices were expected to stay buoyant, hovering around 1,800-2,000 ringgit per ton in the first half, Golden Hope Plantations BHD chief executive Sabri Ahmad said.

Demand was expected to rise, especially from the biodiesel industry, one dealer said.

Malaysian palm oil prices soared 40 per cent last year on the back of biodiesel demand and the market is still holding on to strong gains despite a sell-off of risky assets around the globe.

In Malaysia's physical market, crude palm oil for March shipment from the southern region was quoted at1,972/1,975 ringgit per ton. Trades were done at around 1,970/1,972 per ringgit per ton.—Reuters