SINGAPORE: Malaysian crude palm oil futures touched a new eight-and-a-half month high on Tuesday, buoyed by improving demand prospects, but gains were limited as investors worried about the risks to global growth from high oil prices.
Malaysian export numbers on Monday pointed to strengthening demand, helping to lift palm oil prices which have gained 7 percent so far this month.
"Exports were quite weak last month. Overall demand is higher this month and it should be positive for prices," said James Ratnam, an analyst with TA Securities in Malaysia.
"Recently the US Department of Agriculture revised soybean stocks downwards. So all these things coming together and they are pushing prices up."
Benchmark May palm oil futures on the Bursa Malaysia Derivatives Exchange gained 0.4 percent to close at 3,295 ringgit ($1,095) per tonne. It touched an intraday high of 3,321 ringgit, highest since June 9 last year.
Traded volumes stood at 25,613 lots of 25 tonnes each, higher than the usual 25,000 lots.
Malaysian palm oil exports for the first 25 days of February edged up 1.1 percent compared to a month ago , said cargo surveyor Intertek Testing Services.
Another cargo surveyor Societe Generale de Surveillance reported a higher increase of 4.5 percent for the same period, an improvement compared to the decline in exports for the first 20 days of the month.
Traders attributed the improvement in shipment to the tax-free export quotas for 3 million tonnes of crude palm oil issued in early February.
Market players will be keeping a close watch as cargo surveyors issue February export numbers on Wednesday.
In related news, Wilmar International Ltd, the world's largest listed palm oil plantation firm, said it has acquired a 10.1 percent interest in Goodman Fielder Ltd , Australia's largest listed food company, for $124 million.
Oil prices slipped below $124 a barrel on Tuesday as investors worried about high prices hurting demand, but ongoing supply concerns and the expectation of further liquidity injections from the ECB helped underpin prices at elevated levels.
Other vegetable markets posted moderate gains. The US soyoil contract for March delivery gained 0.3 percent in Asian trade and the most active September 2012 soyoil contract on China's Dalian Commodity exchange inched up 0.6 percent.
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