JAKARTA: Malaysian palm oil futures declined for a third straight session on Thursday after a drop in soybean oil selling momentum, as well as a lower-than-expected U.S. biofuel mandate.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange dropped 1.25% to 3,569 ringgit ($767.86) per metric ton at the closing of the market.

“Overnight Chicago Board of Trade soybean oil dropped and settled limit down, causing Bursa Malaysia Derivative’s FCPO prices to open gap lower,” a Kuala Lumpur-based trader told Reuters, adding that however, prices rose slightly with buying interest picking up later in the morning.

Palm oil falls for second day on US biofuel mandate

Soyoil prices on the Chicago Board of Trade traded 3.44% lower.

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

The Dalian Commodity was closed for Dragon Boat Festival holidays, keeping the overall trading activity low.

The Biden administration on Wednesday increased the amount of biofuel that oil refiners must blend into the nation’s fuel mix over the next three years, but the plan has angered the biofuel industry, which says mandates for corn-based ethanol and biodiesel are not high enough.

Malaysia has maintained its July export tax for crude palm oil at 8% and lowered its reference price, a circular on the Malaysian Palm Oil Board website showed on Wednesday.

Malaysian palm oil products exports for June 1-20 fell 16.8% from the same period in May, cargo surveyor Intertek Testing Services said. Cargo surveyor AmSpec Agri Malaysia said exports fell 12.9%.