KUALA LUMPUR, Nov 1: Malaysian palm oil futures hit fresh highs, after breaking a rally just a day earlier, on news that India had cut import duty on crude palm oil (CPO).

The benchmark third month January futures shot past the 1,000 ringgit a ton barrier to a high of 1,019 before returning to close at the opening price of 1,006.

On Wednesday, the contract ended at 990.

Volume was a hefty 2,373 lots, about the same as the previous day.

The market had been on a bull run since last week on expectations of strong exports for October.

It paused for profit-taking on Wednesday but rallied again on news that India cut the import duty on CPO to 65 per cent from 75.

India is the biggest consumer of palm oil.

New Delhi, which has increased duties four times in the past two years, introduced a cut for the first time on Wednesday despite calls to protect its own oilseeds farmers.

Despite the rally, some traders in Kuala Lumpur said the tax cut may be of more help to Indonesia, which is more aggressive in exporting CPO, than Malaysia, which prefers to ship refined oil.

A weaker rupiah also made Indonesian exports cheaper against the rallying prices in Kuala Lumpur, they said.

Malaysia has a hefty export duty on CPO, but it allowed one million tonnes of duty-free CPO exports earlier this year to counter the competition from Indonesia.

That quota was exhausted last month and there is no word on whether Malaysia plans more duty-free CPO exports.

All lobbying was done by Malaysia to reduce the Indian import taxes, the benefit goes to Indonesia, said a trader.

The November contract for the southern region was bid/asked at 955/960 ringgit a tonne and traded at 965-955. November central was heard at 950/955 ringgit and traded at 955-950.

December contract for both south and central was bid/asked at at 985/995 ringgit, with business at 990-980.—Reuters