JAKARTA, Nov 27: Malaysian palm oil futures closed higher for the fourth consecutive day on Thursday, boosted by expectations that a Chinese move to slash interest rates will underpin demand, traders said.

The benchmark February palm oil contract on the Bursa Malaysia’s Derivatives Exchange closed up 62 ringgit, or 3.88 per cent, at 1,660 ringgit ($524) per ton.

Other traded contracts rose between 12 ringgit and 90 ringgit. The overall volume stood at 10,489 lots of 25 tons each.

Basically demand is there because of the upcoming Chinese New Year festival early next year, said an analyst at Singapore-based brokerage firm.

The analyst also said that China’s interest rate cut would take some time to really support demand as banks were still reluctant to disburse loans.

On Wednesday, the People’s Bank of China (PBOC) cut benchmark rates for one-year loans and deposits by 1.08 percentage points, lowering the cost of one-year borrowing to 5.58 per cent and the rate on 12-month certificates of deposit to 2.52 per cent.

China and India are the world’s top buyers of crude palm oil. The cuts reflected lower estimates for crude oil prices, it said.

BNP projected CPO prices would average 2,400 ringgit in 2010 assuming the credit crisis had been resolved by then.

In Indonesia, the world’s largest palm producer, the state marketing centre in Jakarta sold palm oil at the top price of 5,812 rupiah ($0.485) per kg, up from 5,583 rupiah on Wednesday.

Producers in Medan -- home to Belawan port, Indonesia’s key port for palm oil exports -- sold palm oil at 5,650 rupiah-5,680 rupiah per kg on Thursday. They did not hold an auction on Wednesday.

Refiners in Jakarta sold refined, bleached, deodorised (RBD) palm olein, which is used in cooking oil, at 6,300-6,500 per kg, up from 6,150 rupiah per kg on Wednesday.

In physical market, Malaysian palm oil were traded at 1,620-1,645 ringgit per ton in the southern region and 1,600-1,645 ringgit per ton in the central region.—Reuters