Malaysian palm oil up

Malaysian palm futures ended 1 percent higher on Thursday, lifted by concerns over declining reserves and only a marginal increase in production, dealers said. The benchmark August contract on the Bursar Malaysia Derivatives Exchange finished up 25 ringgit, or 1 percent, at 2,645 ringgit ($772) a tonne, after reaching an intrude high of 2,670 ringgit.
"There is market talk that MPOB data is going to be quite bullish with production going up only marginally and stocks really declining," one trader said. The state-run Malaysian Palm Oil Board will release May output, stocks and export numbers on Monday. On the same day, cargo surveyors will unveil June 1-10 export numbers.
Palm oil largely used as cooking oil but also in products ranging from cosmetics to bodiless hit a new high of 2,764 ringgit on Wednesday before succumbing to profit taking later in the day. The commodity has gained almost 33 percent in 2007 on the back of dwindling supplies and robust demand from top importers India and China.
Indian traders said rising prices might only dent Indian imports as a spate of custom duty cuts and a strong rupee will cushion the blow. Other traded months rose between 8 and 23 ringgit, except for October, which close 10 ringgit lower.
Total volume shot up to 19,544 lots of 25 tonnes, almost double the trade on a routine day. The September contract on the Joint Asian Derivatives Exchange (JADE) was last traded at $750, unchanged from Wednesday. JADE, collaboration between the Chicago Board of Trade and the Singapore Exchange made its debut on Wednesday with US dollar-denominated crude palm oil.
Malaysian traders said the market might not be able to sustain higher levels if no decision came out of tax proposals from India and Indonesia. Indonesia said it was considering raising export tax on palm oil export tax to 6.5 percent if local crude palm oil prices stay above 7,000 rupiah a kilogram until end June, Trade Minister Mari said on Thursday.
In Malaysia's physical market, crude palm oil for June shipment in the southern region was quoted at 2,865/2,880 ringgit a tonne. Trades were done between 2,845 and 2,860 ringgit.