KUALA LUMPUR: Malaysian palm oil futures fell for a second straight day on Tuesday, as pressure from rising inventories and upbeat outlook for U.S crop plantings countered a surge in May exports so far.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed 23 ringgit lower, or 0.53%, at 4,345 ringgit ($1,055.64) a tonne, after rising as much as 1.5% earlier.

Malaysia’s end-April palm oil inventories rose more than market expectation to hit a five-month high of 1.55 million tonnes, as production rose for a second consecutive month, Malaysian Palm Oil Board data showed on Monday.

“The palm oil stockpile level still remains tight relative to historical levels,” Ivy Ng, regional head of plantations research at CGS-CIMB Research, said in a note, adding that the average April inventory over the past 10 years was 1.98 million tonnes.

Exports of Malaysian palm oil products for May 1-10 rose 32.3% to 455,285 tonnes from April 1-10, cargo surveyor Societe Generale de Surveillance said.

“We think exports to Muslim countries could taper off after the Islamic holidays in mid-May. Thereafter, exports should be driven by China and India’s oils and fats inventory replenishment activities,” Adrian Kok, an equity analyst at Kenanga Investment Bank, said in a note.

Production in May will continue to rise around 4% and exports are also expected to be higher, analysts said.

Malaysia’s central bank sees the economy firmly on the path to recovery, as it recorded improvements in domestic spending and exports even as coronavirus cases spiked.

Soyaoil prices on the Chicago Board of Trade declined 0.7%. Dalian’s most-active soyaoil contract fell 0.9%, while its palm oil contract fell 0.2%.