KUALA LUMPUR: Malaysian palm oil futures reversed earlier losses to close higher on Friday on relief that top palm consumer India kept its import tariffs on palm olein unchanged.
The market was earlier down on concerns that India, the world's largest palm oil importer, could raise import tariffs on edible oils in its budget announcement on Friday.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was up 0.5% at 1,960 ringgit ($474.12) per tonne at the close of trade, snapping two previous days of losses.
The market earlier rose as much as 1% to 1,969 ringgit, its highest levels in four sessions. Palm had also charted a 0.5% gain on the week.
India released its 2019/2020 budget on Friday which aims to boost infrastructure spending and foreign investment in a bid to reverse weakening growth and investment that threaten to take the shine off the ruling party's recent landslide election victory.
Among its measures, it imposed a 7.5% import duty on palm stearin in an attempt to boost local refining, but did not amend tariff rates for other soft oils, including palm olein.
"India doesn't import that much palm stearin, its major import is palm olein for which the market was expecting a tariff raise," said a Kuala Lumpur-based futures trader.
Stearin is a solid fat produced when refined palm oil is broken down to extract palm olein, or the liquid form of palm oil used for cooking and baking.
In other related oils, the September soyoil contract on the Dalian Commodity Exchange rose 0.2% and the Dalian September palm oil contract was slightly up 0.1%.
Palm oil prices are impacted by movements in related oils, as they compete for a share in the global vegetable oils market. - Reuters