SINGAPORE: Malaysian palm oil futures declined on Tuesday to a more than two-week low, weighed down by lacklustre export data and demand, as well as weakness in soybean prices on the back of ample supply.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange fell 60 ringgit, or 1.6%, to 3,661 ringgit ($796.04) a metric ton by the midday break. Earlier in the day, it hit the lowest level since Dec. 7, 2023.

Prices are subdued due to “lower exports as a result of weak destination demand and low trade volumes in the first trading day of the year,” said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand & Co.

Exports of Malaysian palm oil products for December fell between 2.1% and 9.9% from November, cargo surveyors AmSpec Agri and Intertek Testing Services said on Friday.

Indonesia has lowered its crude palm oil reference price for the Jan. 1-15 period to $746.69 a metric ton, a trade ministry official said on Friday.

Palm oil posts second consecutive annual loss

Dalian’s most-active soyoil contract and its palm oil contract fell 1.5% and 1.2%, respectively.

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

Abundant rainfall in Argentina’s core farming heartlands over recent weeks is favouring soybean production.

According to Argentina’s Rosario grains exchange (BCR), 75% of soybeans are in “excellent to very good” condition.

The Malaysian ringgit, palm’s currency of trade, weakened 0.22% against the dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.

Analysts warn that global palm oil production is likely to fall this year due to dry El Nino weather, supporting cooking oil prices that dropped more than 10% in 2023.