KUALA LUMPUR: Malaysian palm oil futures rose more than 2% on Monday after hitting a six-week low in the previous session, as traders’ assessed a Reuters’ survey showing an uptick in end-March inventories.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed up 120 ringgit, or 2.16%, to 5,686 ringgit ($1,348.99) a tonne, ending a three-session decline.

Malaysia’s palm oil stockpile at end-March is pegged to remain tight, rising only 0.5% from the month before to 1.53 million tonnes, a Reuters survey showed.

Production is forecast to jump 16.4% to a three-month high of 1.32 million tonnes, but it is likely to be counteracted by a 6.3% rise in exports, which is seen at 1.17 million tonnes, according to the survey.

Malaysian palm oil set for weekly loss as rival soyoil drops

The Malaysian Palm Oil Board will release official data around April 11.

Sentiment was also lifted after reports last week that Malaysia and Indonesia agreed global prices of palm oil should be determined by the two biggest producers and they should not compete, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

“As of now, we don’t know what steps would be taken from both the countries on the palm oil export policy front to avoid competition, but it could be a major thing if Malaysia also raises its export tax on palm oil, which is currently 8% on crude palm oil,” Bagani said.

In related oils, soyoil prices on the Chicago Board of Trade fell 0.18% after rising 1.8% in the previous session.The Dalian exchange was closed for a public holiday.

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

Oil rose above $105 a barrel as concern about tight supply arising from Russia’s invasion of Ukraine and the lack of an Iranian nuclear deal persisted, making palm a more attractive option for biodiesel feedstock.