NEW DELHI: Malaysian palm oil futures rose on Wednesday, tracking higher Chinese soybean oil and palm olein prices, while gains in U.S. soyoil also helped hike sentiment.
Benchmark palm oil futures for September delivery on the Bursa Malaysia Derivatives Exchange were up 2.1 percent at 2,234 ringgit ($560.60) a tonne at the midday break.
Traded volumes stood at 18,925 lots of 25 tonnes each on Wednesday noon.
A Kuala Lumpur-based trader said the fall in futures prices on Tuesday was a knee-jerk reaction to the Malaysian Palm Oil Board (MPOB) data, however, the market was recovering on Wednesday.
"I don't think the upside will last very long. Production of palm oil is higher and exports are slowing down after Ramadan," he said.
MPOB figures on Tuesday showed that the country's palm exports in June dropped nearly 12 percent compared with May. A Reuters poll had pegged June exports at 1.2 million tonnes, down 6.4 percent from May after Ramadan.
The September contract for soybean oil, a substitute for palm oil, on the Dalian Commodity Exchange gained 1.79 percent, while the most actively traded September contract for palm olein rose 2.04 percent.
China is the world's second-largest palm oil consumer after India.
U.S. soyoil futures were up 0.52 percent.
($1 = 3.9850 ringgit) - Reuters