KUALA LUMPUR, May 25: Malaysian crude palm futures closed 2.2 per cent higher on Friday, hitting a fresh near-nine-year high on a spike in rival soyoil and firm exports. The benchmark August contract was up 53 ringgit, or 2.2 per cent, at 2,498 ringgit ($737) a ton. It touched a session high of 2,503 ringgit, a level not seen since August 1998.

The rise in US soyaoil prices overnight and in electronic trading has impacted our palm oil market in a very significant way, said one dealer. Export numbers have been supportive throughout. The palm oil market has gained more than 25 per cent thisyear after surging 40 per cent in 2006 on the back of demand from the biodiesel and food sectors. Other traded months rose between 30 and 66 ringgit, with overall trade at 12,997 lots of 25 tons each.

Traders said they expected nearby contract months to remain firm due to tight supplies at home and healthy demand from top importers China and India.

On Thursday, soyaoil futures on the Chicago Board of Trade made contract highs across the board as the spot price approached a 23-year high.

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 stocks are forecast to decline 9.4 per cent in May to 1.07 million tons, hitting a new three-year low, a Reuters poll showed on Thursday.

Exports of Malaysian palm oil products for May 1-25 fell 1.1 per cent to 918,738 tons from 928,874 tons shipped between April 1-25, cargo surveyor Intertek Testing Services said.

Another cargo surveyor Societe Generale de Surveillence said exports during the period rose 5 per cent to 952,648 tons from 907,330 tons shipped between April 1 and 25.

In the physical market, crude palm oil for May shipment in the southern region was quoted at 2,615/2,625 ringgit a ton.

Trades were done between 2,610 and 2,620 ringgit.—Reuters