KUALA LUMPUR, July 30: Malaysia’s crude palm oil futures firmed on short covering as players prayed for fresh purchases by main buyer India, where poor rains are likely to trim oilseed output, traders said on Tuesday.

There was talk that India will cut import duties for edible oil, reduce base prices and so on, said one dealer. People also expect good exports data tomorrow. That’s why you see this covering, he added.

On Wednesday, cargo surveyors ITS and SGS are scheduled to release July exports data which may reach 950,000 tons, up from 897,811 tons in June.

At the close, the benchmark third-month futures, October was 26 ringgit higher at 1,473 ringgit ($387.63) a ton after trading as high as 1,475 ringgit.

Volume was heavy at 3,146 lots.

Some analysts said the market will trade within the 1,400-1,480 ringgit range this week and begin to look at factors such as drought in India instead of the weather-driven CBOT to lead it.

The Chicago Board of Trade (CBOT) soy futures have dictated direction in the Malaysian market in the past few weeks, but a drop in open interest and volume suggested that players were slowly turning their back on the US market and looking at new factors.

Analysts said local fundamentals, such as prospects of modest increases in palm oil output in coming months, and possible improvement in exports due to drought in India, the world’s largest edible oil consumer, should provide direction.

Traders in India said the country’s oilseed output in the current winter crop, harvested in October-November, could fall by 15-20 per cent from 12 million tons in the same season a year earlier.

Kuala Lumpur traders said India is likely to step up imports in August. Shipment bookings to India have increased to around 70,000 tonnes this week from 20,000 tons last week, they said.

At the physical market, August CPO contracts saw bids at 1,475 ringgit a ton against offers at 1,480 ringgit (south and central). Deals were done at 1,465 to 1,475 ringgit for both sides.

September CPO was offered at 1,480 ringgit against bids of 1,470 for south and central. Deals were done at 1,475 ringgit for south.—Reuters