KUALA LUMPUR: Malaysian palm oil futures slumped over 2% on Tuesday as a steep drop in January exports stoked demand concerns, while an additional tax imposed by top vegetable oil importer India also weighed on sentiment.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange closed down 93 ringgit, or 2.7%, to 3,397 ringgit ($840.22) a tonne, its sharpest daily decline in two weeks.

The contract rose 6% last week to its highest since Jan. 15, snapping two consecutive weeks of losses after top producer Indonesia set higher tariffs on crude palm oil.

“The market is focused on February demand. The decline seen in January could also spillover to February, and that is keeping traders extremely cautious about wanting to buy,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.

Exports of Malaysian palm oil products for January fell between 32% and 37% from December, cargo surveyors said on Monday.

January shipments to India slumped about 70%, and imports by the world’s biggest importer of vegetable oils could remain tight after it imposed an additional tax on crude palm oil imports in an effort to build domestic agriculture infrastructure.

Production will recover soon and put pressure on prices, and the market is expected to remain under pressure until demand returns for Eid celebrations scheduled in May, Paramalingam said.

Malaysia’s government on Tuesday extended a lockdown and broad movement restrictions by two weeks until Feb. 18, as the nation grapples with a surge in coronavirus infections that has pushed the cumulative total past 200,000 cases.

Dalian’s most-active soyaoil contract and its palm oil contract were both down 1.5%. Soyaoil prices on the Chicago Board of Trade rose 0.4%.