Malaysian palm oil futures clocked a 3.64% rise for the week, but fell on Friday as investors booked profits ahead of a long weekend for Eid celebrations and forecasts of higher May production.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange settled down 1.8%, to 2,167 ringgit, after falling as much as 2.94% in the session.

Palm oil, which climbed to its highest since April 20 in the previous session, posted its second week of gains. The Malaysian bourse will be closed on May 25 and May 26.

The market is expecting May inventories to increase further due to higher output from the biggest palm-producing state of Sabah, said Marcello Cultrera, institutional sales manager and broker at Phillip Futures in Kuala Lumpur.

"Palm oil's open interest has flattened compared to the uptrend in prices in the past week as demand improved noticeably at a much lower price range of 1,940-2,150 ringgit," he said.

The world's largest palm oil planter by land size Sime Darby Plantation warned it expected to "face challenges due to disruptions in logistics and supply chain in the event of a prolonged global pandemic".

Travel restrictions to prevent the spread of the coronavirus are causing labour shortages at Malaysia's palm plantations, officials said on Thursday. Oil fell 5% towards $34 a barrel as US-China tensions rose and doubts grew about the pace of demand recovery from the coronavirus crisis.

Weaker crude oil makes palm a less attractive option for biodiesel feedstock. Dalian's most-active soyaoil contract fell 1.39%, while its palm oil contract slipped 1.11%. Soyaoil prices on the Chicago Board of Trade were also down 1.22%.

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