KUALA LUMPUR: Malaysian palm oil futures closed higher on Wednesday, tracking strength in crude and rival edible oils, although talks of key buyer India weighing higher import duties partially dampened sentiment.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 73 ringgit, or 1.92%, to 3,868 ringgit ($897.24) a tonne.
The contract followed a rebound in overnight soyoil prices while higher crude oil prices attracted some bargain hunters, a Kuala Lumpur-based trader said.
Investors are currently looking at any improvement in demand ahead of the Islamic holy month of Ramadan, he added.
Ramadan is anticipated to begin around March 2022. Importers typically stock up on the edible oil to prepare for the festivities.
India, the world’s largest edible oil buyer, may raise import tax on palm oil products in the upcoming budget as domestic farmers are ready to harvest their winter oilseed crops, traders said.
Dalian’s most-active soyoil contract rose 2.2%, while its palm oil contract gained 1%. Soyoil prices on the Chicago Board of Trade were up 1.3 percent.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices extended early gains to rise around 1%, on optimism that the lifting of China’s strict COVID-19 curbs will lead to a recovery in fuel demand in the world’s top oil importer.
Stronger crude futures make palm a more attractive option as biodiesel feedstock.