KUALA LUMPUR, March 28: Malaysia’s palm oil futures ended higher on Thursday, boosted by covering on the physical side where talk of possible purchases by main buyers India, China and Pakistan brought new excitement.

The benchmark third-month June contract was 17 ringgit higher at 1,148 ringgit ($302.11) a ton after trading as low as 1,124 ringgit. Volume was heavy at 2,901 lots.

Kuala Lumpur dealers trading with China said Beijing had so far allowed importers to purchase up to 300,000 tons of palm oil. The next quota, seen at more than one million tons, is expected to be released this week.

India is playing a game. It has to buy palm oil because of the low stocks, but it waits for signs that China will not come into the market as it will cause prices to fall, said one trader.

The trader said India needed to buy some 200,000 tons of palm oil in April to replenish its stocks. Pakistan was expected to buy at least 150,000 tons next month because it has been absent from the market for some time, he said.

China is set to buy 2.4 million tons of palm oil in 2002, up from last year’s 1.4 million tons, following its entry to the World Trade Organization (WTO).

My colleagues just returned from Pakistan and they told me demand is very weak there, he added.

Pakistani dealers said this week slow domestic demand was likely to curb imports in coming weeks, adding that local importers were holding back on new orders in the hope the market would firm up.

In physical palm oil, the April contract for the southern and central regions saw bids at 1,140 ringgit a ton versus offers at 1,145. Trade was reported at 1,130 to 1,140 for south and central.

The May contract for south and central saw bids at 1,140 ringgit against offers at 1,150. There were deals at 1,145 to 1,150 for south and at 1,150 for central.—Reuters