JAKARTA: Malaysian palm oil futures dropped for a second consecutive session on Thursday as a stronger ringgit and weakness in rival vegetable oils weighed on the contract.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange lost 47 ringgit, or 1.2%, to 3,861 ringgit ($852.24) a metric ton by the midday break.

The contract fell 0.18% in July, its second consecutive monthly drop.

“Malaysia crude palm oil futures is tracking Dalian performance closely as well as our ringgit strengthening,” a Kuala Lumpur-based trader said.

The Malaysian ringgit, the contract currency of trade, strengthened against the US dollar for a sixth straight session, rising 0.85% by midday.

A stronger ringgit can reduce buying interest for foreign currency holders.

Dalian’s most-active soyoil contract was down 0.55%, while its palm oil contract dropped 0.66%.

Soyoil prices on the Chicago Board of Trade were down 0.39%.

Palm oil tracks the price movements of rival edible oils as they compete for a share of the global vegetable oils market.

Malaysian palm oil exports in July are seen rising between 22.8% and 30.91%, cargo surveyor Amspec Agri and Intertek Testing Services said.

Malaysian palm oil future drops on strong ringgit

Cargo surveyor Societe Generale de Surveillance (SGS) estimated exports stood at 1.48 million tons, according to LSEG, a 23.6% jump from June exports.

Palm oil FCPOc3 is expected to retest support at 3,881 ringgit per metric ton, a break below which could open the way towards 3,849 ringgit, Reuters technical analyst Wang Tao said .