NEW DELHI: Malaysian palm oil futures closed higher on Wednesday due to a bigger-than-expected fall in January inventories of the tropical oil in top producer Malaysia.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 47 ringgit, or 1.2%, to close at 3,948 ringgit ($825.42).

Palm is higher due to lower inventory levels in Malaysia, said Anilkumar Bagani, research head at Sunvin Group, a Mumbai-based vegetable oil brokerage. However, the absence of fresh buying from key buyer China has capped gains, he said. The rebound in palm oil prices is also likely to be capped by abundant supplies of rival soyoil and sunflower oil, which are “soft” oils available at discounts to tropical palm oil for the first time in more than a year.

Malaysia’s palm oil stocks fell more than expected to their lowest in six months at the end of January as production plunged to the lowest level in nine months amid steady exports.

Palm oil imports by India, the world’s biggest importer of vegetable oils, in January dropped more than 12% from a month ago to a three-month low as negative refining margins for crude palm oil prompted refiners to switch to rival soyoil.