Malaysian crude palm oil futures rose 1.3 percent on Thursday on continued short-covering that kept the market above the key psychological level of 1,300 ringgit despite a lack of new leads. New import tariffs in top destination India had triggered a selling spree in futures a day earlier before concerns about dwindling crop prospects helped the market to rebound by the close. The benchmark third-month crude palm oil contract on Bursa Malaysia Derivatives, May, ended up 17 ringgit at 1,325 ringgit ($348.68) a tonne, the day's high.

Dealers pegged resistance at 1,350 ringgit.

Other traded contracts rose 15 to 18 ringgit.

Volume was a modest 4,756 lots of 25 tonnes each. The market usually sees 6,000 lots or more on a busy day.

India announced late on Tuesday it had cut base import prices for palm oils up to 15 percent and hiked import tariffs by a similar quantum.

But it left unchanged duties on palm oil's main rival soyoil, posing greater disadvantages for Malaysian palm products, which were taxed more heavily than soyoil even before the revision.

"Despite such bearish news, the market still persevered to go above 1,300," said a futures dealer. "This shows we are leaving the 1,200-ringgit range and going to the next level."

Palm oil's next major supply/demand indicator would be export estimates for the period from February 1 to 20, due from cargo surveyors on Monday.

In physical crude palm oil, the February contract saw bids at 1,330 ringgit a tonne and offers at 1,335 ringgit in Malaysia's southern and central regions. Bids/offers closed at 1,315/1,320 ringgit on Wednesday.

Trades were reported at 1,320-1,330 ringgit in both regions.

PALM OIL FUTURES:

February (south): 1335.

Open/High/Low: 1306/1325/1306.

Previous close: 1320.

PALM OIL PHYSICALS:

May (3rd month): 1325.

Previous settlement: 1308.

FUTURES:

Benchmark third-month May up 17 ringgit at 1,325 ringgit ($348.68) a tonne.

PHYSICALS: February offers up 15 ringgit a tonne.

Copyright Reuters, 2005