- Palm oil close at highest since June 11.
- New Indian rules to boost palm oil imports.
KUALA LUMPUR: Malaysian palm oil futures scaled to a near three-weak peak on Thursday, extending gains for a third straight session, driven by prospects of stronger demand after top buyer India allowed imports of refined palm oil and cut tax on the commodity.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange closed up 115 ringgit, or 3.20%, to 3,714 ringgit ($893.54) a tonne.
Palm rose to an intraday high of 4.5% and closed at its highest since June 11. The contract fell 8.2% last month, its biggest monthly decline since April 2020.
India on Wednesday declared that the import of refined palm oil is amended from "Restricted" to "Free," allowing imports of the product for six months.
Earlier this week, the country also cut the import tax on refined palm oil to 41.25% from 49.5% for three months to bring down local edible oil prices.
Top producer Indonesia has set a lower reference price in July for crude palm oil at $1,094.15 a tonne, an official document seen by Reuters showed on Wednesday.
Lower export levies are likely to encourage higher exports from Indonesia and narrow the discount from the benchmark price, Fitch Ratings said in a note, adding, it would weaken benchmark prices.
"However, we do not see any meaningful long-term benefit from the export levy revision, as we expect crude palm oil prices to be significantly lower from 4Q21, limiting the cut in applicable levy rates."
Malaysia is facing a labour shortfall of around 32,000 people and annual losses of 10 billion ringgit due to coronavirus restrictions, the country's commodities minister said.
Dalian's most-active soyoil contract rose 3.4% and its palm oil contract gained 4.2%. Soyoil prices on the Chicago Board of Trade rose 1.6%.
Palm oil is affected by price movements in related oils, as they compete for a share in the global vegetable oils market.