KUALA LUMPUR: Malaysian palm oil futures closed at a near three-week peak on Wednesday, after the world’s biggest vegetable oil buyer, India, reduced its import tax for the commodity.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange closed up 44 ringgit, or 1.24%, to 3,597 ringgit ($866.75) a tonne, its highest closing since June 11.

Palm had earlier hit an intraday high of 3.55%.

India on Tuesday cut the base import tax on crude palm oil to 10% from 15% for three months, the government said in a statement, as the country tries to dampen near record high prices.

Data from cargo surveyors released during the midday break showed Malaysia’s June palm oil exports rose between 7% and 8.6% from the month before, slightly better than market expectations.

“We had all the feel good assortment of news in the market,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.

Production in June is pegged at around 7.5% higher than the month before, which would keep end-stocks at a manageable level, he added.

In top producer Indonesia, the health minister is leading a push for stricter controls as coronavirus infections in the country surge to unprecedented levels, with The Straits Times reporting that the government will tighten restrictions this week.

Dalian’s most-active soyaoil contract rose 2%, while its palm oil contract gained 2.7%.

Soyaoil prices on the Chicago Board of Trade were down 1.2%.

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