Palm oil futures rebounded in Malaysia on indications that that the stock piles in the world's second largest producer may fall this month as exports from the country rise.

The export form Malaysia is rising due to tax free exports compared to a levy on exports in neighbouring Indonesia, which is the largest grower. Exports from Indonesia might fall to the lowest level in four months in February after more buyers moved to Malaysia after the government decided to extend tax free exports in order to clear the record high stockpiles in the country.

According to the latest figures, the contract for April delivery increased 1.1 per cent to 2,532 ringgit or $820 a metric ton on the Malaysia Derivatives Exchange. Data from the Malaysian Palm Oil Board showed that the palm oil futures had fallen the most in more than six weeks yesterday after it was revealed that the stockpiles fell lower than expected in the country.

The government in Indonesia has fixed the duty at 9 per cent this month and this has affected exports from the country. Experts are predicting a fall of 5.6 per cent to 1.51 million from the country.