KUALA LUMPUR, June 3: Malaysian crude palm oil futures rose 0.6 per cent on Tuesday on overnight strength in US soyaoil markets but slower exports capped gains, traders said.

Palm oil, which fell 3.5 per cent last week, has been struggling to recover this week as sales to traditional customers India and China weakened, and rising production and easing crude oil prices kept some investors on the sidelines.

The benchmark August contract on the Bursa Malaysia Derivatives Exchange settled up 21 ringgit to 3,530 ringgit ($1,096) per ton.

Palm oil might be losing its shine, but it has not dived totally beyond 3,500 ringgit resistance level and that might be due to soyaoil, said a trader with a foreign brokerage.

More specifically, palm oil is cheaper than soy. Other traded months rose between 4 and 47 ringgit with the spot month falling slightly. Overall volumes fell to 7,372 lots of 25 tons each from the usual 10,000 lot levels.

Refined palm olein stood at $1,242.50 per ton in Rotterdam, while soyaoil was $1,461.50, which is a 17.6 per cent premium over the palm product, traders have said.

But Dalian’s most active September soyaoil rose 1.1 per cent on account of China’s move to scrap rebates from June 13 on exports of vegetable oils, including soyaoil, peanut oil as well as sunflower oil, to try to keep more supplies at home.

Oil eased to stand under $128 a barrel on Tuesday, as traders weighed the threat to sustained demand from changes in fuel subisidies in Asian nations.

In Malaysia’s cash market, crude palm oil for June shipment in the southern region was quoted at 3,550/3,560 ringgit. Trades were done between 3,540 and 3,550 ringgit.—Reuters