KUALA LUMPUR, May 27: Malaysian crude palm oil futures rose 1.6 per cent on Tuesday, extending five days of gains as soyoil markets started to rally on a mix of weather concerns and strong crude oil prices.

Palm oil’s steady rise over the week was prompted by analysts’ forecasts that it may restart its rally on record crude oil prices.

The vegetable oil, used in products from biofuels to ice-cream, is roughly 16.8 per cent off record highs of 4,486 ringgit in March but has gained 22.3 per cent so far this year.

The benchmark August contract on the Bursa Malaysia Derivatives Exchange settled up 57 ringgit to 3,730 ringgit ($1,151) per ton.

Soyaoil on CBOT and Dalian are giving support to palm oil.

In fact, it’s weather play and rising demand that has bumped up agricultural complexes all over with crude oil in the background, said a trader with a foreign commodities brokerage.

Other traded months rose between 3 and 64 ringgit. Traded volumes stood at 8,486 lots of 25 tons each, easing from the usual 10,000 lots.

Unfavourable weather over the last week and in late April across Argentina’s farm belt may hurt the 2007/08 soy crop, but the crop is still expected to total 48 million tons, the Buenos Aires Grains Exchange said. Soyaoil for July delivery at the Chicago Board of Trade rose 2 per cent while the most-active September contract on the Dalian Commodity Exchange jumped 3.5 per cent.

Malaysian crude palm oil prices may resume their rally if record crude oil prices boost demand for alternative fuels, soaking up high stocks, leading industry analysts said last week.

In Malaysia’s physical market, crude palm oil for May shipment in the southern region was quoted at 3,720/3,735 ringgit. Trades were done between 3,710 and 3,735 ringgit a ton.—Reuters