Malaysian crude palm futures ended marginally higher on Tuesday as players booked profit after the market hit a high on bullish comments from a leading industry analyst. The benchmark August contract finished up 3 ringgit at 2,538 ringgit ($748) a tonne.
It hit a high of 2,590 ringgit, surpassing the previous record of 2,562 ringgit on May 18, 1998. Dorab Mystery, a director at Godrej International Limited, said prices would continue to rise because of strong demand and a squeeze on supplies.
"My current view is that third-month CPO futures will reach 2,600 to 2,700 ringgit in very near future," Dow Jones newswire quoted Mistry as saying. But during the afternoon session, prices retreated as players rushed to book profits. "Once the market reaches a record high, it now becomes a race to take profits quickly before prices begin to fall," said one dealer.
But traders said the market is not expected to fall significantly as strong foreign demand and tight supplies will continue to lift prices. Palm oil prices have gained more than 27 percent this year after surging 40 percent in 2006 on robust demand led by India and China.
Last week a senior official of the Pakistani edible oil industry told Reuters the South Asian nation is expected to import more oil from July because of higher consumption during the Muslim holy month of Ramazan.
Shares of palm plantation firms have hit record highs on bullish prices, led by IOI Corp, Kuala Lumpur Keeping and Golden Hope. Malaysia's plantation index has risen more than 41 percent this year. Other traded months rose between 7 and 38 ringgit, except September, which was down 8 ringgit in overall trade of 14,569 lots of 25 tonnes each.
Malaysian palm oil stocks are forecast to fall 9.4 percent in May to 1.07 million tonnes, hitting a new three-year low, a Reuters's poll showed on Thursday. In the physical market, crude palm oil for May shipment in the southern region was quoted at 2,690/2,700 ringgit a tonne. Trades were done between 2,695 and 2,705 ringgit.
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