KUALA LUMPUR: Malaysian palm oil futures reversed early losses on Thursday, clawing back gains after a four-day rout as the ringgit weakened, although concerns over a global recession limited gains.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange rose 80 ringgit, or 1.97%, to 4,135 ringgit ($934.25) a tonne.

It earlier fell 4.8%, pressured by demand concerns as rival and top producer Indonesia raised its export volumes.

Indonesia is considering cutting its palm oil export levy to encourage more shipments, a cabinet minister said, another move to spur exports after a ban designed to protect domestic cooking oil supplies saw palm oil inventories swell.

Senior Indonesian minister Luhut Pandjaitan said an additional 2.5 million tonnes of palm oil could be absorbed by the domestic market if the country raised the amount of palm oil in its biodiesel mix to 40% (B40).

Tighter monetary policy around the world is dragging the contract but on the other hand, prices are supported by slow production in labour-starved Malaysia, a Kuala Lumpur-based trader said.

“Palm prices look well-supported as discount to soybean oil is wider and prices have fallen to induce buying activity,” the trader added.

A weakening ringgit, palm’s currency of trade, further supported the market. The ringgit fell for a fourth straight day against the dollar, making the commodity cheaper for holders of foreign currency.

Dalian’s most-active soyoil contract fell 0.2%, while its palm oil contract slumped 2.1%. Soyoil prices on the Chicago Board of Trade were up 3.7%.

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