Malaysian crude palm oil futures rose 2 percent on Friday as soybean oil strengthened in the United States and there was strong buying, dealers said. The benchmark third-month June contract on the Bursa Malaysia Derivatives Exchange finished up 39 ringgit, or 2 percent, 2,010 ringgit ($580) per tonne.
"The market is up on very good buying as there is some shortage in physical supply," one dealer said. "Besides that, soybean oil is still holding on firmly." The benchmark contract is just 2.5 percent lower than the eight-year high of 2,062 ringgit reached in December when floods disrupted deliveries.
Other traded months rose between 20 and 45 ringgit, in overall volume of 18,653 lots of 25 tonnes each. Soybean futures at the Chicago Board of Trade rose on Thursday, led higher by 2008 contracts.
Soyoil ended 0.15 to 0.35 cent per lb higher, with May up 0.18 cent at 31.28 cents. Palm oil often tracks the soybean market because both are used in products ranging from food and cosmetics to biodiesel.
Palm oil prices are set to jump more than 20 percent by year-end as global oilseed stocks get depleted and demand from the food and fuel sectors surges, industry officials told an industry conference in Malaysia last week. Malaysian palm oil, which gained almost 40 percent last year, could move slightly downward in the near term, but surging Indian food demand and Europe's insatiable appetite for biofuels will ensure the commodity holds on to the gains this year.
In Malaysia's physical market, crude palm oil for March shipment in the southern region was quoted at 2,010/2,015 ringgit per tonne. Trades were done between 2,000 and 2,010 ringgit a tonne.
Exports of Malaysian palm oil products for March 1-20 rose 0.8 percent to 617,142 tonnes from 612,057 tonnes shipped between February 1-20, cargo surveyor Intertek Testing Services said. Another cargo surveyor, Societe Generale de Surveillance, said exports during the period fell 6.1 percent to 596,774 tonnes from 635,215 tonnes shipped between February 1-20.