February 07, 2008	Thursday	Muharram 28, 1429

KUALA LUMPUR, Feb 6: Malaysian crude palm oil futures rose on Wednesday as investors beefed up positions ahead of the Lunar New Year holidays.

Market sentiment was buoyant after prices hit a record of 3,458 ringgit, boosted by strong soyaoil gains in Asian trade and fears of declining Indonesian exports following a plan to hike up export taxes.

By the midday break, the benchmark April contract on the Bursa Malaysia Derivatives Exchange rose 36 ringgit, or 1.1 per cent, to 3,385 ringgit ($1,048) a ton, after going as high as 3,411 ringgit.

Market volumes are on the thin side but palm oil is still the cheapest oil and has a long way to go in order to keep up with the massive strength in soyaoil, said a trader with a local brokerage.

The palm oil market will be closed on Thursday and Friday to mark the Lunar New Year festival.

Other traded months rose between 30 and 42 ringgit .

Overall trade halved to 4,519 lots of 25 tons each from the usual 10,000 lots.

Malaysia’s state plantation house Felda expects crude palm oil prices to average 3,000 ringgit a ton this year, a Felda official said on Wednesday.

Indonesia said on Monday Jakarta would impose a 20 or 25 per cent export tax on crude palm oil and by-products if international prices climbed to $1,200 and $1,300 a ton.

Indonesian crude palm oil exports are expected to be 12-13 million tons in 2008, at least 10 per cent below an earlier producer forecast of 14.5 million tons due to higher export taxes, an agriculture ministry official said on Tuesday.

In Malaysia, exports are weak with Intertek Testing Services and Societe Generale de Surveillance reporting declines of up to a third to roughly 1 million tons.

In the physical market, crude palm oil for February shipment in the southern region was quoted at 3,400/3,450 ringgit a ton. Trades were done at 3,400 ringgit.—Reuters