JAKARTA: Malaysian palm oil futures closed higher on Tuesday to mark their best day in two weeks, as floods in states of Peninsular Malaysia stoked prospects of some supply slowdown, while import tax cut in India boosted demand.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange ended 2.21% higher at 4,390 ringgit ($1,043.50) - its biggest gain since Dec. 7. On Monday, the contract had slid 2.56%.

"The export drop is lower then expected and production is disrupted in Peninsular. So, it's slightly supportive," a palm trader in Kuala Lumpur said, referring to floods that could hamper the harvesting process.

Palm posts slim gain for the day, worst weekly loss since June

Floods affected seven states in Peninsular Malaysia over the weekend, killing at least eight people and displacing more than 32,000.

Exports of Malaysian palm oil products for Dec. 1-20 fell 5.1% from the same period in November, cargo surveyor Intertek Testing Services said on Monday, while independent inspection firm AmSpec Agri Malaysia said exports fell 6.6%.

Meanwhile, the world's biggest vegetable oil importer India on Monday slashed the basic import tax on refined palm oil to 12.5% from 17.5%, and said it would allow imports of refined palm oil until December 2022.

In related oils, Dalian's soyoil contract for May delivery gained 0.43%, while its palm oil contract gained 0.99%. Soyoil prices on the Chicago Board of Trade rose by 0.83%.

Crude oil prices also rose on Tuesday, though investors remained worried about the rapid spread of the Omicron coronavirus variant, which may dent fuel demand.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market, while stronger crude oil futures typically make palm a more attractive option for biodiesel feedstock.