KUALA LUMPUR: Malaysian palm oil futures rallied more than 3% on Wednesday, recouping all the losses from the previous session as recent price weakness spurred fresh demand from buyers.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives ended up 125 ringgit, or 3.28%, at 3,937 ringgit ($884.72) a tonne, after rising as much as 6% during the session.

The contract was supported by the strength in Dalian oils, while a big discount to soybean oil added to the buying momentum, a Kuala Lumpur-based trader said.

Asian buyers are ramping up palm oil purchases to replenish inventories after prices corrected to their lowest in a year and as top producer Indonesia has scrapped levies on exports.

Exports of Malaysian palm oil products for July 1-20 fell between 2% and 9.6% from the same week in June 1-20, cargo surveyors data showed.

United Plantations said in a filing it views the acute labour shortages, and the COVID-19 pandemic to a lesser extent, as the primary risks in the remainder of 2022.

Malaysia, the world’s second-largest producer, is losing around 57,880 tonnes of palm oil fruit each day, or 1.5 million tonnes per month, due to the labour crunch, the commodities ministry said on Tuesday.

While the plantation industry is working with the government to facilitate the hiring of migrant workers, companies will likely only feel the positive impact by the end of the first quarter of 2023, United Plantations said.

Dalian’s most-active soyoil contract fell 0.1% while its palm oil contract gained 1.5%. Soyoil prices on the Chicago Board of Trade were up 0.7%.

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