BANGKOK, May 22: Malaysian crude palm oil futures ended 1.4 per cent higher on Thursday, supported by record crude oil prices.

But higher vegetable oil reserves in China, the world’s biggest importer, still weighed on palm oil futures which have risen 18 per centthis year, dealers said.

The benchmark August contract on the Bursa Malaysia Derivatives Exchange rose 53 ringgit, or 1.4 per cent, to 3,610 ringgit ($1,121) per ton.

Palm oil prices surged on the back of soaring crude oil prices, a trader said.

The benchmark contract could rise further to trade in a range of 3,600-3,700 ringgit for the next few days, he said.

Other traded months rose between 36 and 60 ringgit.

Overall trade stood at 9,402 lots of 25 tons each.

Exports of Malaysian palm oil products for May 1-20 rose 6 per cent to 830,873 tons, according to cargo surveyor Intertek Testing Services, against market expectations of around 900,000 tons.

Another cargo surveyor, Societe Generale de Surveillance, said exports during the period fell 1.5 per cent to 849,767 tons.

Oil galloped to a high above $135 per barrel on Thursday, extending this month’s near 20 per cent rally after a sharp drop in US crude stocks and the weakening US dollar triggered short covering by investors.

The palm oil market often tracks crude oil because of the growing use of vegetable oils to make biodiesel, which competes with petroleum diesel.

Dealers said the market was waiting for direction from an industry conference in Jakarta, the World Palm Oil Summit and Exhibition, set to run until Friday, where top analysts are due to deliver industry price forecasts.

In Malaysia’s physical market, crude palm oil for May shipment in the southern region was quoted at 3,600/3,620 ringgit. Trades were done at 3,610 ringgit a ton.—Reuters