January 18, 2008	Friday	Muharram 08, 1429

KUALA LUMPUR, Jan 17: Malaysian crude palm oil futures rose three per cent on Thursday, rebounding from two straight days of declines after gains in the soyaoil market, traders said.

Palm oil prices, up 10pc this year, have been fuelled by a supply squeeze due to last year’s monsoon rains and robust demand in the food sector as China locks in supplies for the Lunar New Year in February.

The benchmark April contract on the Bursa Malaysia Derivatives Exchange rose as much as 113 ringgit to 3,376 ringgit ($1,032) a ton. The contract settled at 3,360 ringgit.

Palm oil futures hit a record of 3,420 ringgit on Monday after a rally in commodity markets.

“Financial players are back in the market to take up new positions as soyaoil appears to have halted its losses,” said a senior trader with a foreign commodities brokerage in the Malaysian capital. “Speculative desire is the mood.”

Other traded months rose between 88 and 117 ringgit. Overall volume doubled to 20,798 lots of 25 tons each, from about 10,000 lots that usually change hands on a routine day.

Chicago Board of Trade March soyaoil fell 0.58 cent to 52.73 cents per lb, with back months down 0.32 to 0.62 cent in a downward correction after the recent run-up to record highs.

But in Asian trade, the contract rebounded on short-covering, dealers said.

“Slight gains in the US crude markets have given some support to soyaoil and palm. In fact, traders in these commodity markets are rushing to take up positions,” an analyst with a local brokerage said.

Prices of palm oil, used in products ranging from chocolates and body lotion to biofuel, have scorched exports for the first half of January.

Cargo surveyor Intertek Testing Services reported a decline of 46pc to 394,395 tons in January 1-15, while Societe Generale de Surveillance, said exports during the period fell 38.3pc to 461,598 tons.

In Malaysia’s physical market, crude palm oil for January shipment in the southern region was quoted at 3,350/3,380 ringgit a ton.

Trades were done between 3,350 and 3,365 ringgit.—Reuters