JAKARTA/KUALA LUMPUR: Malaysian palm oil futures closed at their lowest level in two weeks on Tuesday, dragged down by a rise in end-April inventories and the government’s plan to slow the pace of its biodiesel mandate.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange ended down 97 ringgit, or 1.51%, at 6,312 ringgit ($1,441.10) a tonne, its lowest close since April 25.

“Prices tumbled at the back of weak soybean complex prices. Equity and energy markets fell sharply overnight, brought most commodities lower,” a Kuala Lumpur-based trader said.

The losses were somewhat capped by a Reuters’ report of a proposal from Malaysia’s commodities ministry to cut the export tax on palm oil by as much as half, to help fill a global edible oil shortage and grow the country’s market share.

Palm oil suffers biggest weekly fall in seven weeks

Speaking to Reuters in an interview, Commodities Minister Zuraida Kamaruddin said the government would also slow the implementation of its B30 biodiesel mandate.

The mandate requires a portion of the nation’s biodiesel to be mixed with 30% of palm oil and its easing would help prioritise supply to global and domestic food industries.

Meanwhile, data released by the Malaysian Palm Oil Board (MPOB) showed the country’s April palm oil end-stocks rose 11.48% from the previous month to a five-month peak of 1.64 million tonnes.

Exports plunged 17.7% while production rose 3.6%, the data showed.

Malaysia’s exports during May 1-10 jumped between 38.4% and 40.3%, cargo surveyors said.

In related oils, Dalian’s most active soyoil contract and its palm oil contract dropped 0.9% and 0.6%, respectively. Soyoil prices on the Chicago Board of Trade were up 0.4%.

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