KUALA LUMPUR, Jan 29: Malaysian crude palm oil futures ended 1.6 per cent higher on Tuesday as financial players beefed up positions following a recovery in the crude and soyoil markets, traders said.

Global commodity and equity markets have regained their footing on expectations the US Federal Reserve will slash rates again this week to bolster the world’s largest economy.

Palm oil prices are roughly 6 per cent off an historic high of 3,420 ringgit reached two weeks ago as volatile trading and a slowdown in exports pulled down the market.

The benchmark April contract on the Bursa Malaysia Derivatives Exchange settled up 50 ringgit at 3,200 ringgit ($989) per ton, after going as high as 3,230 ringgit.

If crude oil stays above $90 a barrel, which it has, palm oil and soyaoil are bound to follow suit, said a dealer with a foreign brokerage.

The inflow of funds could also indicate that players are short-covering ahead of a long string of holidays starting from the end of the week, he added, referring to City Day celebrations on Friday and Chinese New Year festivities next week.

The falls in palm oil are getting smaller, which is in part due to an increase in buying from Pakistan, said a dealer with a foreign commodities trading firm. But prices should go down a little further for more buying to happen.

Demand for Malaysian palm oil has waned with cargo surveyor Intertek Testing Services reporting a drop of 29.8 per cent to 784,439 tons for Jan. 1-25 while Societe General de Surveillance said exports fell 27.1 per cent to 816,471 tons.

In Malaysia’s physical market, crude palm oil for January and February shipments in the southern region was quoted at 3,210/3,220 ringgit a ton.

—Reuters