Malaysian palm vaults over 6 pct as vegoils recover

KUALA LUMPUR (Reuters) - Malaysian crude palm oil futures rose 6.3 percent on Monday as funds piled back into commodity markets after a sell-off last week, dealers said.

But investors later booked profits, pulling down palm oil prices to Friday's closing levels despite expectations that India duty cuts on palm oil products last week will see the market turn up again.

Used in products ranging from cooking oil to biofuels, palm oil remains roughly 25 percent lower than last month's historic highs of 4,486 ringgit but has begun to turn up after India cut duties on crude and refined palm oils last Thursday.

The benchmark June contract KPOM8 on the Bursa Malaysia Derivatives Exchange rose as much as 211 ringgit to 3,541 ringgit ($1,103) a tonne before settling up 10 ringgit at 3,340 ringgit.

"The short-term outlook could be boosted by India's move to cut palm oil import duties," said Tee Sze Chiah, an analyst with Malaysian investment house Aseambankers, in a research note.

"We reckon there are bargain hunting opportunities on the steep pullbacks."

Other traded months ranged between 119 ringgit drop to a rise of 205 ringgit <#KP0:>. Overall trade shot up to 18,640 lots of 25 tonnes each from the usual 10,000 lots.

Malaysian palm oil futures fell by almost 10 percent last week on a mix of weak vegetable oil markets, equity turmoil and fears of China defaulting on shipments.

Dealers said India's imports of palm oil are likely to increase at the expense of rival soyoil this oil year following a cut in import duty on crude palm oil to 20 percent from 45 percent while soyoil duty was left unchanged.