KUALA LUMPUR, Nov 19: Malaysian palm oil futures ended 3.1 per cent higher on Wednesday, after India hiked import tariffs for rival soyaoil the prior day, heightening hopes for more demand although traders said palm oil was next for a rise.

The benchmark February contract on the Bursa Malaysia Derivatives Exchange settled up 44 ringgit at 1,480 ringgit ($410) per ton.

Palm oil is shielded for now and the increase in soyaoil duties means more of India's import market will go to palm oil, said a trader with a local commodities brokerage. Traders are just shorting up on the lack of other positive domestic news.

India's soyaoil imports will shrink further as a new import tax prompts buyers to shift to palm, traders and industry officials said on Wednesday. However, Malaysian palm oil will not be left out when it comes to import duties, they say.

Other traded months on Bursa Malaysia rose between 30 and 58 ringgit. Trading volume nearly doubled to 18,518 lots of 25 tonnes each.

Palm oil, used in products from biscuits to biofuels, was down about 64 per cent from March's record peak of 4,486 ringgit on a combination of faltering crude oil, rising output and a deepening global recession that threatens demand.

Hamburg-based oilseeds analysts Oil World said on Tuesday that Malaysia's 2009 palm oil output will rise only marginally following years of rapid growth.

The Southeast Asian nation will produce 17.60 million tons of palm oil in calendar year 2009 against an estimated 17.56 million tons in 2008 and 15.82 million tons in 2007, it forecasts.

In Indonesia, the world's biggest palm oil producer, the state marketing centre said it had sold 5,500 tons of crude palm oil out of 8,500 tons it offered, at a top price of 5,025 rupiah ($0.424 per kg), up from 4,828 rupiah per kg on Tuesday.

Producers in Medan -- home to Belawan port, Indonesia's key port for palm oil exports -- did not sell palm oil today. On Tuesday, they sold palm oil at 4,760-4,860 rupiah per kg.

Refiners in Jakarta sold refined, bleached, deodorised (RBD) palm olein, which is used in cooking oil, at about 5,600 rupiah per kg compared to 5,550-5,600 rupiah per kg on Tuesday.

In Malaysia's physical market, crude palm oil November shipment in the southern region saw bids and offers at 1,460/1,465 ringgit.

Trades were done between 1,450 and 1,470 ringgit.—Reuters