April 05, 2007	Thursday	Rabi-ul-Awwal 16, 1428

KUALA LUMPUR, April 4: Malaysian crude palm oil futures climbed 1.4 per cent on Wednesday to new eight-year highs as a slowdown in supplies aroused concern, dealers said.

The benchmark third-month June contract on the Bursa Malaysia Derivatives Exchange was up 29 ringgit, or 1.4 per cent, at 2,115 ringgit ($612) a tonne, a level not seen since January 1999.

Key reasons for the market heading upward is strong demand and slow production, said one dealer.

The market has reached new eight-year highs for the third time since Friday. The third-month contract closed up 1.2 per cent at 2,086 ringgit on Tuesday, boosted by strong gains in the soyabean oil market.Other traded months rose between 2 and 28 ringgit, except for July 2008, which was down 8 ringgit. Overall volume stood at 6,954 lots of 25 tons each.

Dealers said crude palm oil production had not kept pace with palm exports, which are estimated to have risen in March, leading to a temporary shortage in supplies.

Exports are high but production has not come up that much, another trader said.

Exports of Malaysian palm oil products for March 1-31 rose 15.8 per cent to 991,550 tons from 856,192 tons shipped in February, cargo surveyor Intertek Testing Services said.

State-run Malaysian Palm Oil Board will announce March output, exports and stocks data on April 10.

Malaysian palm oil usually follows the US soyaoil market because both commodities are used in products ranging from food and cosmetics to biodiesel.

Malaysian palm oil prices soared 40 per cent last year on the back of biodiesel demand and the market is forecast to rise around 20 per cent this year.

Deals were done at 2,110 and 2,130 ringgit.—Reuters