KUALA LUMPUR: Malaysian palm oil futures slumped nearly 3% on Wednesday, hitting a one-week closing low on fears of lower export demand and anticipation of an increase in production.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange closed lower 105 ringgit, or 2.38%, to 4,303 ringgit ($1,015.82) a tonne, after rallying to a record high last week.

The correction in prices was likely induced by expectations that demand will fall by about 15% over Aug. 1-20, said Marcello Cultrera, institutional sales manager and broker at Phillip Futures in Kuala Lumpur.

“Also, the Indian demand for August is fully covered, while subscriptions for September-October have reached a standstill at current prices,” Cultrera added.

Export shipments during the first half of August plunged between 15% and 24% from the previous month, cargo surveyors data showed on Monday.

Indonesia, the world’s largest palm exporter, experienced greater demand than Malaysia over July and August, partly due to lower export taxes and higher discounts for its crude and refined palm oil.

The situation will change in September as Indonesia is expected to raise its export duties for September to $166 from $93 in August, Cultrera said.