KUALA LUMPUR: Malaysian palm oil futures hit their four-month closing lows on Thursday, pulled lower by higher production outlook and top producer Indonesia’s move to raise its export volumes.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange fell 99 ringgit, or 1.78%, to 5,477 ringgit ($1,244.77) a tonne, its lowest closing since Feb. 16.

For the week, the contract has lost 7.5% so far.

“The market continues to be under pressure in anticipation for positive growth in production and concerns on demand shifting back to Indonesia after they resume exports,” a Kuala Lumpur-based trader said.

Indonesia, the world’s top palm oil exporter, has issued permits for shipment of 602,142 tonnes of the edible oil under its Domestic Market Obligation scheme as of late Wednesday, trade ministry official Oke Nurwan said.

Palm ends four-day decline

India has reduced the base import prices of crude palm oil, soyoil, gold and silver, the government said late on Wednesday.

Dalian’s most-active soyoil contract fell 2.6%, while its palm oil contract gained 3.8%. Soyoil prices on the Chicago Board of Trade were down 0.6%.

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

Oil prices erased early gains to head lower, a day after a fall triggered by a U.S. interest rate hike, though tight supplies limited losses.

Weak crude oil futures make palm a less attractive option for biodiesel feedstock.

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