By Chester Tay

KUALA LUMPUR--Malaysian and Indonesian plantation stocks were lifted after crude palm oil futures hit a new record high on rising demand and tight supply.

Sime Darby Plantation Bhd. rose 5.7% and Kuala Lumpur Kepong added 2.5% in early Asian trading Tuesday, while Singapore-listed Wilmar International and Indonesia's Astra Agro Lestari were up 3.1% and 2.7%, respectively.

The gains came after benchmark prices for palm oil on the Kuala Lumpur Derivatives Exchange rose 0.3% on Tuesday morning to a record 5,686 ringgit ($1,357) a ton, putting it 26% higher this year.

Malacca Securities said it is upbeat on the plantation sector given tighter output for the edible oil, coupled with India's recent move to lower import taxes for the oil. CPO production is being curbed by persistent labor shortages in Malaysia and restrictions on exports from Indonesia.

Demand from India, one of the world's largest buyers of palm oil, is expected to pick up after it cut its import tax to 5.0% from 7.5% on Sunday. India's palm oil imports in January fell 29% on year as refiners stepped up buying of soybean oil and sunflower oil as substitutes for pricier Malaysian palm oil, noted brokerage Phillip Nova.

Palm oil prices have been breaking records high recently, supported by gains in soybean oil and crude oil prices as well as cargo surveyors' expectations of lower production and stockpiles in key producing nations in February. Surveyors AmSpec Agri Malaysia and SGS are expected to report estimates for Malaysia's Feb. 1-15 exports later in the day.

Kuala Lumpur Kepong and Sime Darby Plantation are scheduled to release their earnings results this week and Wilmar's is due next week.


Write to Chester Tay at chester.tay@wsj.com


(END) Dow Jones Newswires

02-14-22 2251ET