JAKARTA, Aug 6: Malaysian crude palm oil futures rose 1.45 per cent on Wednesday, lifted by short-covering after touching a new nine-month low a day earlier, but sentiment remained weak on worries about shipment defaults.

Prices of palm oil used in products from soap to margarine and biodiesel are down 38 per cent from an all-time high of 4,486 ringgit in March as weak crude oil prompted profit-taking and due to rising global vegetable oil supply.

The benchmark October contract on the Bursa Malaysia Derivatives Exchange ended up 40 ringgit or 1.45 per cent at 2,790 ringgit ($851.7) a ton.

Crude oil stood firm above $119 a barrel on Wednesday, recovering from three-month lows triggered by concerns about weakening demand from a global economic slow down. US light crude was up 30 cents at $119.47 a barrel recovering from lows of $118.10 hit earlier in the session.

Rumours of shipment defaults after a sharp drop in prices kept sentiment in the market weak.

Exports are uncertain at this level. Prices went down too fast so there are a lot of rumours saying some default in China and India, the trader said.

Malaysia has dropped sharply in the past days which knocked local prices. But demand is good. Buyers are daring to pay higher than our prices as they need cargoes to meet shipment contracts, said an official at the centre.

Palm oil producers in North Sumatra’s Medan home to Belawan port, the key port for palm oil exports sold crude palm oil at 7,120 rupiah a kg, still within a range of 7,025-7,150 rupiah on Tuesday.

Refiners in Jakarta sold RBD palm olein, used as cooking oil, at 7,500-7,600 rupiah a kg, down from 7,800 rupiah a kg on Tuesday.

In Malaysia’s physical market, August crude palm oil was offered at 2,800/2,820 ringgit in the southern and central region. Trades were done at 2,770-2,800 ringgit at southern region and 2,750-2,800 ringgit at the central region.—Reuters