KUALA LUMPUR, Jan 8: Malaysian crude palm oil futures fell almost 1 per cent on Tuesday, retreating from record highs, as investors booked profits on weaker crude markets.

But growing speculation of an import duty cut on vegetable oils by India, the world’s second largest importer, curbed further losses, traders said.

Prices of palm oil have been fuelled by a blend of booming demand across Asia, floods in key palm producing regions of Malaysia and strength in US crude oil and soyaoil markets.

The benchmark March contract on the Bursa Malaysia Derivatives Exchange finished down 27 ringgit to 3,161 ringgit ($967) per ton.

Palm oil, used in products ranging from sun tan lotion and ice-cream to biofuels, hit a historic high of 3,188 ringgit on Monday and traders expect the market to strengthen further after consolidation.

But going forward, there can only be an upward direction because India needs to import more palm oil to make up for the shortfall in domestic edible oil supplies and duty cuts need to happen, sooner or later, he added.

Other traded months fell between 7 and 29 ringgit. Overall trade stood at 6,749 lots of 25 tons each.

In July 2007, India reduced import duty on crude palm oil to 45 per cent from 50 per cent to check rising inflation. Duty of soyabean oil was cut to 40 per cent from 45 per cent.

India, which imports around 40 per cent of its annual consumption of 13 million tons, buys palm oil from Malaysia and Indonesia and soyaoil from Argentina and Brazil.

The South Asian country is set to import 1.2 million tons of vegetable oils in the first quarter of 2008, up 400,000 tons from the year-earlier period, despite high global prices, traders said.—Reuters