KUALA LUMPUR: Malaysian palm oil futures rose more than 3% on Tuesday after falling to their worst session in a month, as the ringgit hit its lowest in five-and-a-half years, making the vegetable oil cheaper for buyers holding other currencies.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange had gained 134 ringgit, or 3.24%, to 4,272 ringgit ($957.20) a tonne by the midday break.

On Monday, the contract fell 6.4% on lacklustre August exports data and weaker crude oil prices.

A widening discount between crude palm oil and soybean oil, now at about $520 per tonne, and the weakening ringgit have spurred demand, Refinitiv Commodities Research said in a note late on Monday. The ringgit fell 0.13% against the dollar to hit its lowest since January 2017.

The currency has weakened around 7% so far this year.

Palm oil to hover below 4,452 ringgit

The market was also supported by short-covering and technical buying after prices managed to stay above 4,100 ringgit, a Kuala Lumpur-based trader said.

Exports of Malaysian palm oil products for Aug. 1-15 fell 9.5% to 516,072 tonnes from the same period in July, cargo surveyor Societe Generale de Surveillance said.

Dalian’s most-active soyoil contract fell 0.6%, while its palm oil contract lost 0.4%. Soyoil prices on the Chicago Board of Trade were up 0.05%.

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

Palm oil looks neutral in a narrow range of 4,085 ringgit to 4,269 ringgit per tonne, and an escape could suggest a direction, Reuters technical analyst Wang Tao said.