Traders said prices of palm oil, used in products ranging from cosmetics and confectionaries to biodiesel, could rise further as production takes a hit after monsoon flooding last month.
The benchmark March contract on the Bursa Malaysia Derivatives Exchange rose as much as 77 ringgit to 3,159 ringgit ($961) per tonne, surpassing the previous record of 3,150 set last week.The contract settled up 53 ringgit at 3,135 ringgit.
"It will go up, look at what is happening to crude oil and soybean oil," said a trader with a domestic broker. "We are in the middle of a strong bull run."
Other traded months rose between 47 and 64 ringgit. Overall trade stood at 11,968 lots of 25 tonnes each.
Oil prices dipped on Thursday, after jumping to a lifetime high of $100 the day before, fuelled by expectations of thinning US stockpiles, the falling dollar and geopolitical risks.
Vegetable oils, such as palm and soybean oil, often track crude oil prices because of growing use of edible oils in the making of biofuels, which compete with petroleum.
Soyoil notched an all-time high when the August contract touched 52.43 cents, surpassing the previous record of 51 cents a lb set in October 1974
Shares of Malaysian palm plantation firms, which have hit record levels on bullish prices, rose further on Thursday.
Planters such as Sime Darby IOI Corp KL Kepong and Asiatic Development were up in contrast to the broader market which settled slightly lower The stock market's plantation index ended up 2.4 percent.

FLOODS, LOWER OUTPUT
Dealers said palm oil has potential to extend gains on concerns over lower production.
"Ultimately it will go up further as local factors will come into play from next week," said another trader referring to December palm oil numbers to be unveiled by the Malaysian Palm Oil Board next week.
"Not only December will be lower, there will be a follow-through impact of flooding in January."
Trade estimates on production losses in December range from 20 to 35 percent from 1.65 million tonnes of crude palm oil produced in November.
Traders said soaring palm oil prices, which gained 53 percent in 2007, are unlikely to impact exports as the tropical product was still cheaper when compared with rapeseed and soybean oil.
"There won't be much impact on palm oil demand because all other options like soybean oil and rapeseed oil are more expensive," another trader said.
Exports of Malaysian palm oil products rose 10.8 percent to 1,428,772 tonnes in December, cargo surveyor Intertek Testing Services said. Another cargo surveyor, Societe Generale de Surveillance, said exports during the month rose 13.9 percent to 1,443,850 tonnes.
In the Malaysian physical market, crude palm oil for January shipment in the southern region was quoted at 3,1503,155 ringgit a tonne. Trades were done between 3,140 ans 3,150 ringgit. Palm, soy and crude oil prices at 1018 GMT Contract

Copyright Reuters, 2007