KUALA LUMPUR: Malaysian palm oil futures fell more than 1% on Tuesday, marking its second straight session of losses, dragged by weakness in rival oils and expectations of a decline in December exports. The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange closed down 89 ringgit, or 1.86%, at 4,703 ringgit ($1,111.82) a tonne.

Palm futures tracked weakness in soyoil and Dalian palm oil prices, although spot prices are holding well, a Kuala Lumpur-based trader said. The spot contract eased 2% but remained near an all-time high at 5,128 ringgit ($1,212.29) a tonne.

“Market may find it difficult to head lower as we are entering lower production season,” the trader added. The Southern Peninsula Palm Oil Millers’ Association (SPPOMA) estimated production during Dec. 1-10 fell 2.8% from the same period in November, traders said on Monday.

Market talk has also pegged exports during the first half of December to decline 5.7% from the month before, according to traders. Cargo surveyors are scheduled to release their estimates on Wednesday. Dalian’s most-active soyoil contract fell 1.6%, while its palm oil contract slipped 1.7%. Soyoil prices on the Chicago Board of Trade were down 1%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market. Oil prices dipped towards $74 a barrel after the International Energy Agency (IEA) said that the new Omicron coronavirus variant was set to dent the global demand recovery, making palm a less attractive option for biodiesel feedstock.