KUALA LUMPUR, May 16: Malaysian crude palm futures closed 1.2 per cent higher on Wednesday, supported by strong soyaoil prices and fresh buying. Traders said the market was expected to remain higher due to tight supplies and strong export demand.
The benchmark August contract finished up 27 ringgit at 2,323 ringgit ($683) a ton after hitting a session high of 2,343 ringgit.
Buying into the market now gives players more ammunition to make profit as there are expectations that prices will still go up on high demand and short supply, said a dealer.
To some extent, soyaoil is also supporting the market.
On Tuesday, Malaysian crude palm oil futures fell 1.8 per cent as players booked profits after the market reached near nine-year highs.
The palm oil market has gained more than 16 per cent this year after surging 40 per cent in 2006 on demand from the biodiesel and food sectors.
Other traded contracts rose between 26 and 42 ringgit.
Overall volume rose to 16,109 lots of 25 tons each, compared with 12,000 lots on a routine day.
Malaysia's Palm Oil Board said the country's April closing stocks fell 11.65 per cent to 1,181,320 tons, the lowest in almost three years.
The board said palm oil output in April rose 4.11 per cent, less than expected, and exports showed a steady growth of 5.9 per cent.
Exports of Malaysian palm oil products between May 1 and 15 fell 4.5 per cent to 637,090 tons from 666,793 shipped between April 1-15, according to cargo surveyor Intertek Testing Services.
Another surveyor, Societe Generale de Surveillance, said exports during the period fell 1.5 per cent to 632,736 tons from 642,492 shipped between April 1-15.
Dealers said the decline in exports was marginal and buying from India and China was expected to pick up.
In the physical market, crude palm oil for May shipment in the southern region was quoted at 2,500/2,510 ringgit a ton.
Deals were done between 2,500 and 2,510 ringgit.—Reuters
