KUALA LUMPUR, May 10: Malaysian palm oil market extended gains as players played catch-up to soyaoil futures in Chicago, which is expecting market-friendly crop report later on Friday.

The benchmark third-month July futures closed 16 ringgit higher at 1,253 ringgit ($329.74) a ton after trading as low as 1,243 ringgit.

Volume was heavy at 2,667 lots.

Some traders said the market was generally friendly due to anticipation of stocks falling to below 900,000 tons in end-June from 1.04 million tons estimated for April.

But others said they were cautious about the progress of soyabean harvests in Latin America as India, the world’s largest edible oil importer, already shows more appetite for soyaoil because of better prices.

Softoil arrivals in India reached 70,000 tons in April, but imports are expected to increase to 170,000-200,000 tons in May, said one trader. India is not chasing palmoil, he added.

South American soyoil was quoted at $500/ton C&F India compared with crude olein at $580, said the trader.

Some traders said talk circulated in the market that Pakistan, one of Malaysia’s main palm oil buyers, planned to increase import duties for RBD palm olein.

Crude palm oil (CPO) prices on Malaysia’s Derivatives Exchange are expected to remain bullish on the back of strong demand after prices surged 4.2 per cent over the past week, dealers said Friday.

CPO prices closed at 1,256 ringgit (331 dollars) a tonne at the end of the week.

Demand is firm. Buying sentiment is strong, a dealer with a local brokerage said.

The palmoil market would trade between 1,267 to 1,270 ringgit a tonne next week, the dealer said, adding it could even hit 1,300 by end of the week.

Another dealer also said market indications pointed to upward movement.

It is expected to go up further, he said, adding there was widespread belief fresh demand from key consumers India and China would emerge.

It could hit 1,300 ringgit, he added.

In the futures market, the May contract rose 46 ringgit over the week to settle at 1,256 ringgit a ton. June gained 48 ringgit at 1,255 while the July contract added 46 ringgit to 1,253 ringgit a ton. The average daily price for May was 1,233 ringgit a ton.—Reuters/AFP