* Up to 60,000 tonnes of palm oil deliveries delayed in Sabah
* Road to key palm oil export port partly cut off
* Traders fear a repeat of 2008 La Nina driven floods

31/01/2011 (Futures Pros), Kuala Lumpur - Rain-driven floods have disrupted Malaysian oil palm estates from transporting the vegetable oil to refineries and ports, which may trigger a supply squeeze and boost prices.

La Nina-induced rains have inundated some estates in Sabah state on Borneo island and southern Johor state on mainland Malaysia -- the top oil palm growing regions that account for more than 50 percent of total output.

Malaysia is the second largest palm oil producer in the world after Indonesia.

As much as 60,000 tonnes of crude palm oil heading to refineries in Sabah on Borneo island have been delayed as floods make it difficult for trucks to get through the estate roads, said two planters.

Floods have also covered parts of the main road to peninsula Malaysia's key palm oil export port of Pasir Gudang in southern Johor state, slowing the transport and loading of cargoes, refiners said.

"We are shipping out some palm oil products today and we have been told that the roads to Pasir Gudang are flooded. If the rains continue for another week, there will be a lot of congestion," said one refiner.

Malaysian crude palm oil futures climbed 1.4 percent on Monday after the news as traders fretted over the a possible supply squeeze. China's most active soyoil contract on the Dalian commodity exchange jumped 1.7 percent.

"The markets are reacting because we are in a shorter trading week due to the Chinese New Year holidays. Some people might be caught with their pants down on this," said a trader with a local brokerage.

"This story sounds very familiar to the La Nina floods in early 2008 that covered many oil palm estates in Johor and parts of Sabah. We are in for a bull run."

The floods then set off a scramble for supplies among Chinese traders that powered Malaysian palm oil futures to a record high of 4,486 ringgit by March 2008.

Planters say the current flood situation in Johor could become worse after three main rivers in Johor, which are near oil palm estates, burst their banks on Sunday.

The Department of Irrigation and Drainage Malaysia said if the downpour continued, another five more rivers could overflow.

Apart from delayed deliveries, heavy rains and floods will increase the moisture content for oil palm fruit that can affect yield quality.

"We could be looking at double digit declines for palm oil production in January and February. Stocks are going to be at their tightest ever," said a planter in Sabah.

Malaysia's December palm oil stocks fell to a five-month low in December, as a sharp fall in exports was outpaced by a decline in output.  (Reporting by Niluksi Koswanage; Editing by Ed Lane)