Malaysian palm oil futures reversed early losses on Tuesday, as bargain hunting and costlier rival oils on the Dalian Commodities Exchange supported prices.
The benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange closed to trade 0.6% higher at 2,746 ringgit ($658.51), after dropping more than 1% throughout the session.
"Palm oil prices recovered on bargain buying, especially from India where importers are seen covering some of the December shipment volume tracking downside correction in morning session," said Anilkumar Bagani, research head at Sunvin Group, a Mumbai-based vegetable oil broker.
Stronger rival oils on the Dalian further helped prices, he added. Dalian's January soyaoil contract and its palm oil contract recovered from earlier losses to trade 0.1% and 0.7% higher respectively.
Elsewhere, soyaoil prices in CBOT rose 0.4% after falling sharply overnight as traders awaited concrete signs of progress in trade negotiations between the United States and China before buying into a beaten-down market.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The sentiment was also boosted by a bullish biodiesel consumption outlook, which is seen to rise to 10.1 million kilo litres in 2022.
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