KUALA LUMPUR: Malaysian palm oil futures extended early gains on Tuesday, recouping losses from last week after the market suffered its deepest drop in seven months on weak demand amid increased Indonesian supply.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed up 74 ringgit, or 2.22%, to 3,412 ringgit ($764.68) a tonne, snapping a six-session decline.

In the previous session, the contract hit its lowest closing since September.

The contract rose to adjust to the price movement in related markets during a long Labour Day weekend in Malaysia, but is weighed down by demand concerns due to palm oil’s unusual premium over competing vegetable oils, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

“Palm oil demand has been constantly under pressure due to a broader selloff seen in the soft oils,” he said.

Malaysia’s palm oil exports during April fell 18% from the month before, cargo surveyor Intertek Testing Services said. Another cargo surveyor, AmSpec Agri Malaysia, said exports declined 21%.

Indonesia said last week it will lower its mandatory domestic sales threshold for palm oil producers to 300,000 tonnes a month starting in May, although traders said uncertainties over the policy remains.

Soy oil prices on the Chicago Board of Trade rose 0.8%. The Dalian exchange was closed for a public holiday.

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