KUALA LUMPUR, Oct 27: Malaysian crude palm oil futures rose more than one percent on Thursday, spurred by talk that India could reduce duties for some palm oil products.

A rebound in US soyaoil lifted sentiment, dealers said.

Trade volumes were at their heaviest since the beginning of the week, touching 6,099 lots of 25 tons each, against Wednesday’s tally of 4,242 lots.

The benchmark third-month January crude palm oil contract on Bursa Malaysia Derivatives closed up 17 ringgit, or 1.2 per cent, at 1,435 ringgit ($380.64) a ton. Its high for the day was 1,438 ringgit.

Other traded months ended up 14-17 ringgit.

The market can easily see 6,000 lots or more on a busy day, but players have been cautious on taking major positions this week because of holidays next week.

The market will be closed on Tuesday, Thursday and Friday next week for the Diwali and Eid al-Fitr festivals.

Dealers attributed Thursday’s hefty trade to speculation that India could resort to another adjustment of edible oils duties, this time favouring palm.

India buys nearly half its annual needs of around 11 million tons in the form of palm oils from Malaysia and Indonesia and soft oils from Argentina and Brazil. It fixes base prices to prevent importers from under-invoicing the products and paying lower taxes.

India last revised base prices on Oct. 15 when it raised taxes for all palm and soya oils.

There was no announcement on Thursday of any changes to those prices.

But we’re hearing rumours that the base prices of some palm products could be revised down by as much as 30 per cent, said a trader in Kuala Lumpur. That’s what’s got people excited here.

People are confusing between customs duties and base prices, said a trade official in New Delhi.

December soyaoil on the Chicago Board of Trade settled up 0.08 cent at 23.61 cents a lb in Thursday’s electronic trade conducted during Asian business hours. It had fallen 0.25 cent at Wednesday’s close in Chicago.

Prices of physical Malaysian crude palm oil were also up on Thursday, taking their cue from the futures market.

Offers for October delivery closed at 1,440 ringgit, against bids at 1,437.50. Offers/bids closed at 1,430/1,425 on Wednesday.

Thursday’s trades were reported at 1,430-1,440 ringgit.

—Reuters