KUALA LUMPUR: Malaysian palm oil futures reversed early gains on Wednesday, ending at a two-week low on concerns over weak demand as Malaysia kept its February export tax rate at 8%, but losses were limited by higher soyaoil prices.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange closed down 6 ringgit, or 0.16%, to 3,689 ringgit ($912.89) a tonne, its lowest closing since Dec. 31.

Palm had earlier touched an intraday high of 1.2%.

“The palm oil market still seems under pressure on not-so-welcoming January export demand and reductions in soyaoil cash prices in Argentina, forcing palm oil to adjust its discount to remain competitive,” said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

Malaysia kept its export duty for crude palm oil at 8% for February, according to a government notice.

The world’s second-largest palm producer has begun a 14-day movement restriction to curb rising COVID-19 cases and is also under a nationwide state of emergency that could last until August. The curbs will also likely result in lower domestic consumption of palm oil this month, which could raise inventories from 13-year lows, Bagani said.

US soyabean supplies in September will be smaller than previously forecast due to a reduced estimate of last fall’s harvest, the US Agriculture Department said on Tuesday, intensifying fears of shortages in 2021 and pushing up prices to multi-year highs.

Soyaoil prices on the Chicago Board of Trade were up 0.5%. Dalian’s most-active soyaoil contract fell 0.1%, while its palm oil contract slipped 0.4%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.