KUALA LUMPUR: Malaysian palm oil futures slipped on Wednesday to its lowest closing in 12 days as weak April exports and forecasts of higher output weighed on market sentiment.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed down 113 ringgit, or 2.91%, to 3,775 ringgit ($856.01) a tonne, its biggest daily loss since March 22.

Prices slumped after the Southern Peninsular Palm Oil Millers Association (SPPOMA) reported a 35% monthly rise in production during the first 10 days of April, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.

“Demand is another worry in April, with prices of competing vegetable oils like sunflower oil and rapeseed oil narrowing versus palm,” he added.

Export of Malaysian palm oil products for April 1-10 fell 16.2% to 408,663 tonnes from 487,530 tonnes shipped during the same period in March, cargo surveyor Societe Generale de Surveillance said on Tuesday.

Meanwhile, soybean production in Argentina will fall to a 23-year low, smaller than previously thought, as a crop-wasting drought decimated fields in the key South American producer, the US government said.

Soyoil prices on the Chicago Board of Trade fell 1.1%. Dalian’s most-active soyoil contract gained 0.2%, while its palm oil contract was down 0.2%.

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

Paramalingam said that overall prices will remain stable with Eid coming and mills remaining shut for a longer period on account of the holidays.