Palm oil prices reach highest levels in almost a year

KUALA LUMPUR, July 12 Agence France Presse (AFP) - Malaysian palm oilprices breached the 1,000 ringgit (263 dollars) level for the first timein 10 months Thursday due to a bout of speculative buying, brokers said.The sharp surge in prices was attributed to a report by the Malaysian PalmOil Board released earlier Thursday which showed better-than-expectedmarket conditions."The sharp surge in the market has caught a lot of traders by surpriseespecially those who are short. It's a bit overdone," said a local broker.He said there was a bout of frenzied buying following the release of thereport at midday. This helped push prices above the crucial 1,000 ringgitlevel for the first time since last September.The report showed that output declined about six percent to 924,855 tonnesin June from 985,062 tonnes in May.Stocks fell almost 17 percent to 596,260 tonnes in June compared with717,687 tonnes in May."It is now a supply-led market where many consumers who were caught shortare coming in to buy," said anothr broker."But I think the market has gone haywire. Everbody is still groggy aboutthe situation. The report does not justify the sharp gains."Malaysia, the world's largest palm oil producer, has watched with dismayas the price plunged from a high of 2,377 ringgit a tonne in 1998.The government has begun a replanting project and told the national powerfirm to burn palm oil to generate electricity as part of efforts to reducestocks and cut production.