KUALA LUMPUR, Jan 7: Malaysian crude palm oil futures hit a new high on Monday, rising 2.2 per cent on fears of tight supplies amid market talk that India was planning to reduce import duties on vegetable oils.

Prices of palm oil in recent weeks have been fuelled by a blend of booming demand across Asia, floods in key palm producing regions of Malaysia and strength in US crude oil and soyaoil markets.

Traders said now talk of an import duty cut by India, the world’s second largest edible oil importer, had given a new push to palm oil, used in goods ranging from suntan lotion and chocolates to biofuel.

The benchmark March contract finished up 2.2 Per cent, or 68 ringgit, at 3,188 ringgit ($972) per ton, surpassing the previous high of 3,159 ringgit reached last week.

The market is trigger-happy because there are rumours that Indian officials are in final stages of preparing a new tariff structure for vegetable oils such as palm oil and soyabean, said a leading trader.

India, which imports around 40 per cent of its annual consumption of 13 million tons, buys palm oil from Malaysia and Indonesia and soyaoil from Argentina and Brazil.

Indian traders suggested market talk of duty cuts might be correct, saying prices were too high.

Global prices are going through the roof. The duty cut in an option before the government, said Atul Chaturvedi, vice-president of leading commodities trading company Adani Exports Ltd.

But a finance ministry official, who declined to be identified, said: “We get to hear rumours of duty cut everyday.

It is a wishful thinking. India is set to import 1.2 million tons of vegetable oils in the first quarter of 2008, up by 400,000 tons from the year-earlier period, despite high global prices, traders said.

In Malaysia’s physical market, crude palm oil for January shipment in the southern region was quoted at 3,160/3,180 ringgit a ton. Trades were done between 3,150 and 3,165 ringgit per ton. —Reuters