VEGOILS-Palm off lows as India tax unchanged; oil weighs

KUALA LUMPUR, July 6 (Reuters) - Malaysian crude palm oil futures bounced off 3-month lows on Monday as India left import duties unchanged for vegetable oils, although sharply lower crude oil dented investor sentiment.

Palm oil, mostly produced in Indonesia and Malaysia, has started the second half of this year on a bearish note, losing nearly 5 percent in the first week of July.

"The India budget fear was a non-event but weaker oil is pulling everything down," a trader with a local commodities broker said.

"Today's close is much higher the last week's so hopefully the bull is growing some legs."

The benchmark September contract KPOc3 on Bursa Malaysia's Derivatives Exchange fell as much as 75 ringgit to 2,100 ringgit ($592.9) per tonne, a level unseen since April 2, but settled down 46 ringgit at the end of the session.

Volumes stood at 11,624 lots of 25 tonnes each.

The market had expected India to impose a nominal tax on crude palm oil imports and marginally raise the levy on refined oils in the budget. Please see [ID:nDEL62751]

As the second largest consumer of vegetable oils in the world, India allows tax free imports of crude variants, while it levies a 7.5 percent tax on refined imports.

But crude oi CLc1, falling to around $64 a barrel, kept risk appetites low. Global vegetable oil markets move in tandem with crude oil prices as soyoil and rapeseed oil in South America and the United States are used as a feedstock for biofuel.

U.S soyoil for July delivery BON9 dropped 1.1 percent and the most-active January soybean oil contract DBYU9 on China's Dalian Exchange fell nearly 1 percent.


INDONESIA PALM TRADES

In Indonesia, the world's top producer, the Jakarta-based state marketing centre sold 8,500 tonnes of palm oil at a top price of 6,547 rupiah ($0.640) per kg, against 6,756 rupiah on Friday. [OILS/TEND]

Producers in Medan, home to Indonesia's main palm oil export port of Belawan, did not hold any palm auction.

Meanwhile, refiners in Jakarta offered refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 6,900 rupiah per kg, unchanged from Friday.