KUALA LUMPUR: Malaysian palm oil futures rallied more than 7% on Tuesday, hitting a near three-week high after key market China said it would further ease border controls for inbound travellers.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange jumped 274 ringgit, or 7.15%, to 4,104 ringgit ($928.51) a tonne, its biggest one-day jump in three months.

China will stop requiring inbound travellers to go into quarantine starting from Jan. 8, the National Health Commission said on Monday in a major step towards easing curbs on its borders, which have been largely shut since 2020.

Following the announcement, Dalian’s most-active soyoil contract gained 4.4%, while its palm oil contract rose 5%.

Bursa Malaysia’s palm oil futures were playing catch-up with the Chinese markets, and fresh buying in the physical market is needed to sustain this rally, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

Palm oil logs second weekly drop on weak demand

The Chicago Board of Trade was closed.

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

Indonesia plans to set the crude palm oil reference price for Jan. 1 to Jan. 15 at $858.96 per tonne, deputy coordinating minister of economic affairs Musdhalifah Machmud told Reuters.