By Pratik Parija Dec. 31 (Bloomberg) -- Palm oil rose for a second day in Malaysia to the highest in almost seven months on anticipation demand from India, the second-biggest consumer, will increase. Palm oil, which has more than doubled in the last decade, has surged 56 percent this year on rising demand from India and China, the biggest user. Tight supplies of soybean oil earlier this year due to drought damage in South America has also fueled price gains. “Demand is expected to be quite strong, especially from India, now that the soybean harvesting is done and yields are not improving,” Ben Santoso, an analyst at DBS Vickers Securities (Singapore) Pte., said by phone from Singapore. “On top of that, Chinese demand is still quite strong.” March-delivery futures gained as much as 2.1 percent to 2,649 ringgit ($773) a metric ton on the Malaysia Derivatives Exchange, highest since June 2. They were at 2,641 ringgit at the 12:30 p.m. break in Kuala Lumpur. “Palm oil is expected to trade between 2,200 and 2,800 ringgit next year and the higher part of that range should happen some time in the first quarter of 2010,” Santoso said. “I don’t expect any moderation until the end of the second quarter of next year.” September-delivery palm oil traded on the Dalian Commodity Exchange rose as much as 2.4 percent to 7,220 yuan ($1,057) a ton, bringing this year’s rally to 44 percent. Soybean oil in Chicago rose as much as 0.3 percent to 40.05 cents a pound. To contact the reporter on this story: Pratik Parija in New Delhi at pparija@bloomberg.net;

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