KUALA LUMPUR, Dec 7: Malaysian crude palm oil futures ended 0.7 per cent higher on Friday, rebounding from the previous day’s five-week lows as crude and soyoil markets bounced on the strength of equity markets.

Palm oil, just 6.5 per cent off a record high of 3,068 ringgit hit last week, has been trading choppily in the past few days, making hedging difficult for refiners and plantation firms, dealers said.

But fears of rising supply and a slowdown in exports due to the red hot prices have mounted again, cutting into gains.

The benchmark February contract on the Bursa Malaysia Derivatives Exchange settled up 20 ringgit to stand at 2,870 ringgit ($864) a ton, after going as high as 2,898 ringgit.

Until yesterday, the fear was that crude would fall towards $80 a barrel and palm oil would plunge as a result, but today there has been a rebound and all the financial players have begun short-covering again, a head trader at a commodities brokerage firm said.

Crude oil markets increasingly influence prices of vegetable oils such as soyaoil and palm because of the growing use of edible oils in making biofuels which compete with petroleum.

Traders said key production, stocks and export figures for November, due to be released on Monday by the Malaysian Palm oil Board, would add pressure to gains created by crude oil prices.

These are still important factors but crude oil will be a bigger factor as long as it stays above $90 a barrel, another trader with a local brokerage said.

The trader added that the market awaited reports from cargo surveyors Societe Generale de Surveillance and Intertek Testing Services on exports for the first 10 days of December on Monday.

The edible oil, used in products ranging from ice cream to body lotion, is up nearly 44 per cent this year.

Malaysian palm oil stocks rose 9 per cent at end-November as a slight decline in exports and an increase in production lifted supplies, a Reuters poll showed on Thursday.

Palm oil output in Malaysia, one of the world’s top producers, rose 5 per cent to 1.66 million tons, according to a median estimate of five plantation houses polled by Reuters.

In Malaysia’s physical market, crude palm oil for December and January shipments in the southern region were quoted at 2,870/2,880 ringgit a ton. There were no trades by the end of the session.—Reuters