JAKARTA: Malaysian palm oil futures extended loss on Wednesday, as traders booked profits following early gains that were triggered by a drop in November stockpiles.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange lost 96 ringgit, or 1.94%, to 4,855 ringgit ($1,095.94) a metric ton at the closing. Malaysia’s palm oil stockpiles dropped for a second consecutive month in November, falling 2.6% from the prior month to 1.84 million tons, data from the Malaysian Palm Oil Board (MPOB) showed on Tuesday. The drop in inventories could fuel a rally in benchmark futures.

Crude palm oil production declined 9.8% in November to 1.62 million tons, the lowest for the month since 2020, while palm oil exports plunged 14.7% to 1.49 million tons, the board said.

Dalian’s palm oil contract fell 1.12%, while its most-active soyoil contract rose 1.72%. Soyoil gained 0.68% at the Chicago Board of Trade. Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.

Cargo surveyor Intertek Testing Services said on Tuesday that exports of Malaysian palm oil products for Dec. 1-10 rose 3.9%, while according to independent inspection company AmSpec Agri Malaysia, it rose 1.1%. Oil prices climbed on Wednesday, with market participants expecting demand to rise in China, the world’s largest crude importer, after Beijing announced it would relax monetary policy to try to stimulate economic growth. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.