KUALA LUMPUR, Sept 19: Malaysian crude palm oil futures jumped 3.6 per cent on Friday as crude oil prices went through the key $100-a-barrel level, traders said.

Vegetable oil is now trading at roughly half its record levels, battered by bumper harvests, defaults by Asian consumers and financial market turmoil.

The benchmark December contract rose as much as 78 ringgit to 2,263 ringgit ($654) before settling at 2,259 ringgit.

Palm oil hit a 17-1/2 month low at 2,200 ringgit on Thursday before surging 7.1 per cent as cash and futures trade picked up on the strength of energy markets.

The market appears to have priced in all the defaults, financial turmoil and high production,” said a trader with a local brokerage. “Now there is talk that production for September will be down 15 per cent because of biological tree stress. Other traded months rose between 52 and 85 ringgit.

Overall trade rose to 12,414 lots of 25 tons each from 10,000 lots.

Malaysian palm exports have started to slow, with cargo surveyors reporting declines of up to 8.5 per cent during the Sept. 1-15 period, while September inventories, which opened at a lower-than-expected 1.8 million tons, are expected to balloon.

Cargo surveyor Intertek Testing Services will unveil Sept.

1-20 estimates over the weekend while Societe General de Surveillance will report on Monday.

Importers from China, the world’s largest vegetable oil buyer, have defaulted on palm oil shipments, heightening fears of a massive stock congestion in Asian producing countries.

News of the China defaults comes on the heels of Indian palm oil buyers trying to defer some shipments on Wednesday after a heavy sell-off in vegetable oil markets, while traders said Pakistan had yet to cover its needs for the fourth quarter.

Oil rose on Friday on expectation a comprehensive US government plan would help battered financial markets.

Indonesian crude palm oil prices rose on Friday, tracking gains in the Malaysian palm futures.

The price is just following palm futures in Malaysia. The rebound in stock markets in the region also helped boost buyer confidence, said a trader in Jakarta.

In Malaysia’s physical market, crude palm oil for September and October shipments in the southern region was 2,260/2,270 ringgit. Trades were done at between 2,230 and 2,270 ringgit.

—Reuters