KUALA LUMPUR: Malaysian palm oil futures reversed early gains on Thursday to end lower for a second consecutive day after an industry group forecast a rise in March production.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed down 44 ringgit, or 1.14%, to 3,824 ringgit ($869.68) a tonne, after rising 1.2% earlier in the day.

The Malaysian Palm Oil Association forecast March production up 2.27% from the month before, traders said.

Supporting prices, a Reuters survey on Wednesday forecast Malaysia’s palm oil inventories at March-end had plunged 16.3% from the month before to 1.77 million tonnes, their lowest level in eight months.

“The palm market does not look bullish in the near term, as Indonesia is expected to be aggressive in selling after Ramadan due to the current low exports,” said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand & Co.

India’s March palm oil imports jump on discounts

“Demand from India and China is still lacking and Ukrainian sunflower oil has captured the market share,” he added.

Argentina’s third plan to increase its foreign currency reserves by boosting soybean exports will take effect on Saturday until May 24, a government source said.

The “soy dollar” plans, launched in the second half of 2022, aim to increase sales and exports of soybeans and its by-products by offering producers an exchange rate higher than the official rate of 210 pesos per dollar.

This is putting more pressure on the market, Saiya said.

Soyoil prices on the Chicago Board of Trade were down 0.2%, its third consecutive daily loss. Dalian’s most-active soyoil contract fell 0.6%, while its palm oil contract slipped 0.5%.

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