KUALA LUMPUR: Malaysian palm oil futures closed higher on Monday after trading in a tight range following last week’s sharp drop, with a likely rise in April inventories capping gains.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange gained 21 ringgit, or 0.33%, to 6,421 ringgit ($1,465.31) a tonne, after falling for two sessions.

Palm prices plunged 10% last week on the possibility of top producer Indonesia lifting its ban on exports, although it is still unclear how long the policy that has hit global edible oil supply would remain in place.

“A prolonged ban on Indonesia palm oil could lead to demand destruction caused by higher palm oil prices, as well as insufficient supply of palm oil in the global market,” Ivy Ng, regional head of plantations research at CGS-CIMB Research, said in a note.

Malaysia’s palm oil inventories at the end of April likely rose for the first time in six months to 1.55 million tonnes as production and imports climbed, a Reuters survey showed on Friday.

The Malaysian Palm Oil Board and cargo surveyors are scheduled to release their supply and demand data on Tuesday.

Dalian’s most-active soyoil contract fell 0.9%, while its palm oil contract eased 1.7%. Soyoil prices on the Chicago Board of Trade were down 0.3%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Oil prices slipped, along with stock markets in Asia, due to weak China data and fears of a global recession dampening oil demand.

Weaker crude makes palm a less attractive option for biodiesel feedstock.