KUALA LUMPUR, Feb 25: Malaysian palm oil futures soared nearly 6 per cent to a new high on Monday, the biggest rise in a single day, as surging demand for vegetable oils and a possible global supply squeeze lifted prices.

Expectations of strong demand from India and China and fears of tight supplies in coming months lifted the market to a record high of 3,914 ringgit a ton ($1,218) a ton, taking gains this year to nearly 30 per cent.

But the benchmark May contract on the Bursa Malaysia Derivatives Exchange settled up 168 ringgit, or 4.5 per cent, at 3,866 ringgit a ton as industry players traded cautiously in the afternoon and waited for views from a price outlook conference.

The magic 4,000 ringgit level is in sight and will definitely be breached before this conference ends. Bursa Malaysia will hold its annual palm oil conference from Feb. 25 to Feb 27, and dealers expect bullish price outlooks from top industry analysts Dorab Mistry, James Fry and Thomas Mielke.

From November to January, China imported a million tons of edible oil each month. That’s all vegetable oils put together. That’s a huge number -- something the market was not ready for.

It certainly looks like the same problem as in India. Palm oil futures have been fuelled by surging European demand, a flood of investments into commodity markets and Jakarta’s plans to hike export taxes.

India will be in the market to import up to 400,000 tons of palm oil and about 50,000 tons of soyaoil in the next three months, as importers rush to take advantage of a deepening discount for palm versus soya oil, a leading industry official said on Monday.

With a possible squeeze in palm supplies in mind, Godrej Industries has set up a joint venture firm with Malaysian planter IJM Plantations to develop palm estates and crude palm oil mills in India, Godrej’s managing director Nadir Godrej said on Monday.

Exports of Malaysian palm oil products for Feb. 1-25 rose 16.4 per cent to 913,062 tons from 784,439 tons cargo surveyor, Intertek Testing Services reported while Societe Generale said exports rose 10.6 per cent to 903,375 tons.

In Malaysia’s physical market, crude palm oil for February shipment in the southern and central regions were quoted at 3,850/3,870 ringgit a ton. Trades were done between 3,850 and 3,870 ringgit.—Reuters