KUALA LUMPUR: Malaysian palm oil futures rose over 3 percent on Friday, reversing early losses to end up 1.5% this week as news of India ramping up purchases after slashing its import tax for the commodity soothed demand concerns. The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange closed up 111 ringgit, or 3.4%, at 3,338 ringgit a tonne, its highest closing since Nov. 19.
Palm rose 1.5% for the week, its fifth weekly rise in six. India, the world's biggest edible oil buyer, had on Thursday slashed import tax on crude palm oil to 27.5% from 37.5% to bring down rising food prices.
The South Asian country's imports of palm oil are set to rise by as much as 100,000 tonnes a month from December after the tax cut makes it cheaper than rival edible oils, industry officials said.
The news alleviated some demand concerns after exports of Malaysian palm oil products for Nov. 1-25 fell 21.2% to 1,127,495 tonnes from the same period in October, according to data released by cargo surveyor Societe Generale de Surveillance on Thursday.
Gains were further boosted by stagnant production in Malaysia as rainy weather and labour shortage hamper output. Dalian's most-active soyaoil contract fell 0.4%, while its palm oil contract rose 0.5%. The Chicago Board of Trade was closed for a public holiday. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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