SINGAPORE: Malaysian palm oil futures closed more than 1% higher on Thursday, tracking gains in the crude oil market, while traders awaited export and production data from the world’s second-biggest producer for more cues.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange closed 55 ringgit, or 1.4%, higher at 3,961 ringgit ($844.20) per metric ton.

The contract lost 3.8% on Tuesday, its biggest one-day drop since May 31 last year. “It is getting a bargain buying based on some support levels after the correction in prices and now, the energy prices are higher in Asian hours, so it is providing further support,” said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

“Key buyer India is gradually increasing its purchases and China is also active in the market. We expect prices to go up from here.” India’s palm oil imports rose 12.4% in May from the previous month to reach a four-month high as a recent price correction led to higher purchases, five dealers told Reuters.

Crude oil extended gains from the previous session amid growing expectations the Federal Reserve will cut interest rates in September. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

Dalian’s most-active soyoil contract gained 1.2%, while its palm oil contract added 1.6%. Soyoil prices on the Chicago Board of Trade rose 1.5%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.