KUALA LUMPUR: Malaysian palm oil futures rebounded on Wednesday, tracking strength in crude and rival edible oils, although talks of key buyer India weighing higher import duties limited the advance.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 58 ringgit, or 1.53%, to 3,853 ringgit ($889.43) a tonne by the midday break.

It had closed 1.5% lower in the previous session.

The contract followed a rebound in overnight soyoil price while higher crude oil prices attracted some bargain hunters, a Kuala Lumpur-based trader said.

Investors are currently looking at any improvement in demand ahead of the Islamic holy month of Ramadan, he added.

Ramadan is anticipated to begin around March 2022. Importers typically stock up on the edible oil ahead to prepare for the festivities.

India, the world’s largest edible oil buyer, may raise import tax on palm oil products in the upcoming budget as domestic farmers are ready to harvest their winter oilseed crops, traders said.

Dalian’s most-active soyoil contract rose 1.9%, while its palm oil contract gained 0.8%. Soyoil prices on the Chicago Board of Trade were up 0.4%.

Palm oil slips on India, China demand concerns

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

Oil prices rose, extending the previous session’s gains, driven by optimism that a relaxation of China’s strict COVID curbs will lead to a demand recovery in the world’s top oil importer.

Stronger crude futures make palm a more attractive option as biodiesel feedstock.