JAKARTA, Aug 7: Malaysian crude palm oil futures rose nearly 2 per cent on Thursday, lifted by a recovery in crude oil and rival soyaoil markets.Expectations for a recovery in overseas demand also offered some support to the market.

Palm oil -- used in products from soap to margarine and biodiesel -- has lost all its price gains this year as weak crude oil has spurred profit-taking in agricultural markets and on a build-up in global vegetable oil supply.

The reddish-brown oil is now trading 36.5 per cent below an all time high of 4,486 ringgit a ton hit in early March.

The benchmark October contract on the Bursa Malaysia Derivatives Exchange closed up 55 ringgit, or 1.97 per cent, at 2,845 ($866.5) ringgit a ton.

Contracts for other traded months rose between 34 to 64 ringgit. Overall volume stood at 13,252 lots of 25 tons.

Malaysia’s July palm oil stocks are expected to slip 2.2 per cent from record levels a month ago as surging overseas sales outweighed a slight increase in production, a Reuters poll showed on Thursday.

India’s vegetable oil traders are reneging on contracts to import palm oil as global prices slump and the domestic oilseed crop recovers, a senior trade official said on Thursday.

It’s not a factor anymore in the market. People already know when prices fall there will be shipment defaults, the dealer said.

Indonesian palm oil prices rebounded on Thursday, tracking Malaysia’s market and good demand.

In Jakarta, the state marketing centre sold crude palm oil at 7,148 rupiah ($0.786) a kg, up 1.5 per cent from 7,038 rupiah a kg on Wednesday.Gains in Malaysia offered support to the market.

Palm oil producers in North Sumatra’s Medan -- home to Belawan port, which is the key port for palm oil exports -- sold crude palm oil at 7,025-7,160 rupiah a kg, up from 7,120 rupiah a kg on Wednesday.

Refiners in Jakarta sold RBD palm olein, used as cooking oil, at 7,550 rupiah a kg, still within range of 7,500-7,600 rupiah a kg on Wednesday.

There are some producers who sell at 7,700 because they have already bought raw material at higher prices, said a dealer in a refiner in Jakarta.

In Malaysia’s physical market, August crude palm oil was offered at 2,835/2,850 ringgit in the southern and central region. Trades were done at 2,800-2,850 ringgit at southern and central region.—Reuters