KUALA LUMPUR, Feb 13: Malaysian crude palm futures jumped as much as 3.7 per cent to hit 5-week highs on Friday as investors took positions on fears drought conditions may worsen in rival soyaoil-producing Argentina.

Prices of palm oil, which have risen to the key resistance level of 2,000 ringgit per ton, have been steadily climbing on the back of lower domestic inventories.

Malaysia’s market is up on borrowed strength from soyoil, a trader with a local commodities broker said.

Whether this translates to more exports for Malaysian palm oil is another thing altogether, because there is another school of thought which says exports will not be so great next week.

Benchmark April contract settled up 67 ringgit at 1,995 ringgit ($552.3) per ton, after going as high as 2,000 ringgit, a level unseen since Jan. 7.

Other traded contracts gained between 25 and 130 ringgit .Overall volume shot up to 15,176 lots of 25 tons each from the usual 10,000 lots.

Cargo surveyors have already reported drops of up to 15 per cent in Feb. 1-10 palm orders, to 372,782 tons and are expected to unveil much lower figures for the first 15 days of February on Monday.

In Indonesia, the world’s biggest palm oil producer, Jakarta-based state marketing centre sold palm oil at a top of 7,157 rupiah ($0.608) per kg, up from 6,989 rupiah per kg on Thursday.

Refiners in Jakarta offered refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 7,700 rupiah per kg, up from 7,500 rupiah per kg a day earlier.

Palm is getting closer to 2,000 (ringgit), which is good news for farmers. As far as cooking oil price is concerned, I just hope that government doesn’t intervene too much, a trader in Jakarta said.

Cooking oil is not a key component of consumer inflation in Indonesia but its use by the poor means any sharp price rise has the potential to trigger social unrest. The government usually tries to stabilise price.

Producers in Medan -- home to Belawan port, Indonesia’s main palm oil export port -- did not hold palm oil tender on Friday.

In Malaysian physical market, palm oil for Feb. shipment was quoted at 2,000 and 2,010 ringgit per ton in the southern region. Trades done at 1,970 and 2,000 ringgit.—Reuters