KUALA LUMPUR: Malaysian palm oil futures jumped almost 8.5% on Monday, tracking gains in soyoil for their biggest daily rise in four months, although Indonesia’s move to lift its export levy weighed on sentiment.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange jumped 308 ringgit, or 8.49%, to 3,937 ringgit ($884.52) a tonne, its biggest daily gain since March 9.

Indonesia has scrapped an export levy for all palm oil products until Aug. 31 in a fresh attempt to boost exports and ease high inventories, finance ministry officials said on Saturday, adding that the move would not disrupt government revenue.

The world’s biggest producer will have to export 6 million tonnes of palm oil by the end of August if it wants to cut its ballooning inventory levels back to normal, the Indonesian Palm Oil Association (GAPKI) said.

“The announcement did not come as a surprise as the government has indicated its plans to cut the levy since July 6 and is part of a series of measures taken by the government to clear the current high palm oil stocks,” Ivy Ng, regional head of plantations research at CGS-CIMB Research, said in a note.

Indonesia plans to set a crude palm oil reference price every two weeks so that its tax rate can move more in line with market prices, CNBC Indonesia reported, citing the trade minister.

The market has factored in the levy removal, and strong Chicago soyoil prices due to weather concerns and short covering lifted prices of palm oil, a Kuala Lumpur-based trader said.

Soyoil on the Chicago Board of Trade gained 1.7%, extending Friday’s 4% rise. Dalian’s most-active soyoil contract gained 5.2%, while its palm oil contract rose 5.2%.

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