19//4/06 SINGAPORE (Reuters)  -   Malaysian palm oil prices will likely rise to between RM1,500 and RM1,550 a tonne in the near term from RM1,470 as European demand for alternative fuels grows with the rise in crude oil prices, a top industry official said on Tuesday.

The Malaysian Palm Oil Association chief executive Azizi Meor Ngah told Reuters prices were expected to rise despite expectations of an increase in domestic output to 15.2 million tonnes in 2006 from last year's 14.9 million.

“We are expecting an upward adjustment in palm oil prices because crude oil prices have gone up. European demand is quite strong,” he said.

He said China's palm purchases from Malaysia in 2006 would likely rise to 3.5 million tonnes from 2.9 million tonnes.

And India's new rules requiring all genetically modified products to carry a declaration from the exporter might help to boost palm oil sales, he said.

The benchmark third-month July crude palm oil contract on Bursa Malaysia Derivatives in Kuala Lumpur was up RM2 a tonne at RM1,472 in early trade on Tuesday. It ended up RM8 a tonne at RM1,470 on Monday after trading as low as RM1,454. – Reuters