June 07, 2007	Thursday	Jamadi-ul-Awwal 21, 1428

KUALA LUMPUR, June 6: Malaysian crude palm oil futures fell 3 per cent on Wednesday as players took profit after the market peaked to a record high on news that Indonesia and India were considering tax changes to cope with surging prices.

Booming demand for palm oil, whose prices have almost doubled since January 2006, could come under pressure in key buying nations China and India as buyers feel the heat, dealers said.

The benchmark August contract on the Bursa Malaysia Derivatives Exchange finished down 81 ringgit, or 3 per cent, at 2,620 Malaysian ringgit ($767) a ton after wiping out all the gains made during the day.

Suddenly, it dawned upon the players that the market had gone too high, said a leading trader. Consumers all over will not be able to absorb these high palm prices. Players are going to outprice themselves from this market. Palm oil -- which is largely used as a cooking oil but also in products ranging from margarine to biodiesel -- hit a new high of 2,764 ringgit during the morning session, surpassing the previous historic high of 2,701 ringgit.

Other traded months closed down between 20 and 94 ringgit, except the January 2008 contract, which was up 18 ringgit.

Shares of palm plantation firms have hit record highs on bullish prices, led by sector bellwethers such as IOI Corp ,Kuala Lumpur Kepong and Golden Hope.

Malaysia's plantation index has risen almost 50 per cent this year.—Reuters