Malaysian crude palm oil (CPO) futures rebounded from early losses to close mixed on Wednesday, helped by news that India has raised the base import price of rival crude soybean oil.
An overnight plunge in Chicago soyoil futures had weighed on palm oil prices at the outset.
The benchmark third-month futures, May, ended unchanged at 1,965 ringgit ($517.10) a tonne, after hitting a low of 1,920.
Other traded contracts finished up seven ringgit to down 10 ringgit.
Overall volume rose to 4,433 lots from Tuesday's 2,688, although a two-day trade conference by the Malaysia Derivatives Exchange (MDEX) to discuss palm oil supply, demand and price outlook had kept many players away from the market.
"The Indian news helped lift sentiment but people were cautious after what happened on the CBOT last night," said a trader.
India, the world's largest edible oil importer, raised the price of crude soybean oil to $710 a tonne from $643, a move traders said would hit soyoil imports. But it left the base import price of palm oils unchanged.
India fixes base prices to check loss of revenue due to under-invoicing by some importers. Traders pay duties on imports, whose value is calculated using these base prices and not the prices at which they purchase oils.
Traders said the increase in the base price of crude soybean oil was likely to hit imports in the coming months because palm oil was cheaper.
They said palm oil stands to gain because the disparity in prices has further widened with the revision of soyoil's base price.
Soyoil futures on Chicago Board of Trade (CBOT) ended 0.49 cent to 1.62 cents a lb down on Tuesday after conflicting market talk on crop estimates.
March soyoil ended 1.22 cents lower at 33.35 cents a lb, after hitting a new 19-1/2-year top of 35.03. May soyoil closed 1.52 cents down at 33.03 a lb.
Soyoil and palm oil compete for the same export markets and their prices often move in step.
In physical trading of CPO on Wednesday, the March contract saw bids/offers at 1,995/2,000 ringgit a tonne in the southern and central regions, versus Tuesday's closing quotes of 1,990/2,000.
Trade was reported at 1,990-1,995 ringgit in both regions.
April saw bids at 1,985 ringgit a tonne against offers at 2,000 in both the southern and central regions. No trade was done.
PALM OIL FUTURES:
March (south): 2000.
Open/High/Low: 1924/1980/1920.
Previous close: 2000.
PALM OIL PHYSICALS: May (3rd month): 1965.
Previous settlement: 1965
FUTURES: Benchmark third-month May unchanged 1,965 ringgit ($517.10) a tonne.
PHYSICALS: Also ended flat.