30/10/2007 (Daily Express News), Kuala Lumpur - Crude palm oil physical prices reached a record high of RM3,000 per tonne for November Monday, buoyed by skyrocketing oil prices of US$93 per barrel.

According to dealers, the rising crude oil prices was an indication of the potentially higher demand for biofuel as an alternative fuel.

As for the futures market, the January 2008 contract rose RM110 to a new high of RM2,910 per tonne.

The palm oil market reached its fourth record high in two weeks and is set to move even higher on strong global demand and supply shortfalls due to rival producer Indonesia raising palm oil export taxes, the dealers said.

They added that the price for palm oil was also boosted by reports that China might be slashing import duties for vegetable oils, which means increased export opportunities for Malaysian palm oil.

"Soyoil prices have already increased almost 46 percent this year and other vegetable oils, including palm oil, are likely to follow," one of the dealers said.

Palm oil and soyoil are increasingly tracking the movements in the crude oil market because of growing demand for both commodities as feedstock for biodiesel.

Shares of palm oil plantation firms have hit record highs, led by forerunners IOI Corp and Kuala Lumpur Kepong, with the former closing 35 sen higher at RM7.50 and the latter 50 sen higher at RM15.60.

--Bernama--