Malaysian crude palm oil futures jumped by 4.4 percent on Thursday, boosted by strengthening soyabean oil prices and prospects of strong demand from India after New Delhi scrapped edible oil import tariffs. Palm oil, used as a cooking oil and in products ranging from cosmetics, candies to biofuels, has lost close to 27 percent since hitting a record high of 4,486 ringgit a tonne last month.
"India is sniffing around and buying in small quantities," said one trader with a leading plantation house in Kuala Lumpur. "We expect the demand to rise because prices have come down considerably and edible oil has become cheaper for Indian consumers after the removal of import duties."
The benchmark June contract on Bursa Malaysia Derivatives Exchange rose as much as 141 ringgit to 3,311 ringgit ($1,039) per tonne in trade, holding on to gains of more than 7 percent made this year. The contract finished the session at 3,276 ringgit.
Spot soyaoil at the Chicago Board of trade was down 0.7 percent at 54.69 cents per pound, after rebounding in overnight US trade. But the most-active September soyaoil contract at Dalian Commodity exchange was up nearly 2 percent. Dealers said support for the most-traded palm oil contract stood at 3,000 ringgit. "As of now, it is unlikely to fall below the 3,000 ringgit level.
But if we have a huge stock build up then there is strong possibility for the market to go below 3,000 ringgit," said S.Paramalingam, a broker in Kuala Lumpur. Malaysian Palm Oil Board is due to unveil March production, exports and stocks data on Thursday. India on Monday scrapped import duties on crude edible oils and banned exports of non-basmati rice amid a raft of measures to stem rising inflation, which hit a 14-month high in mid-March and has alarmed policymakers.
Soyabean futures on the Chicago Board of Trade surged on Wednesday as prospects for increased export interest spurred a rebound from the previous day's sell-off, traders said. May soyabean oil closed 2.9 cents per lb higher at 55.05 cents.