JAKARTA: Malaysian palm oil futures plummeted on Monday after top palm oil producer Indonesia said it was considering a larger export quota to reduce high domestic inventories amid concerns of rising stocks in Malaysia.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange fell 7.65% to close at 4,348 ringgit ($985.72) per tonne, after Friday’s 4% decline.

It fell as much as 9.98%, touching its lowest level since Sept. 22, before regaining some losses.

Indonesia proposed raising palm oil export quotas and is considering increasing mandatory levels of biodiesel in fuel mixes to prop prices for farmers at a time when domestic palm oil inventories are high, a senior minister said on Saturday.

“The increased availability of Indonesian palm oil export is a bearish thing for other palm oil origins, especially for Malaysia and the market is reacting to it,” said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

The latest moves by Indonesia were taking place as some market participants were concerned about a palm oil stock rebuild in Malaysia amid expectations of higher production and sluggish export data, a trader in Kuala Lumpur added.

Exports of Malaysian palm oil products for June fell 7.4% on monthly basis to 1.23 tonnes, cargo surveyor Societe Generale de Surveillance said on Friday.

Meanwhile, Dalian’s most-active soyoil contract fell 1.91% and its palm oil contract slipped 2.15%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.