KUALA LUMPUR: Malaysian palm oil futures fell more than 2% on Monday, hitting an 18-day low, as a higher export duty and a slowdown in September shipments so far weighed on sentiment.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange tumbled 5.37% at the opening bell, but swiftly pared losses.

It closed lower 94 ringgit, or 2.21%, to 4,167 ringgit ($994.51) a tonne, down for a second straight session.

Palm oil prices have been correcting since last week after the Malaysian Palm Oil Board (MPOB) estimated a surge in end-August palm oil inventories, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

“Despite the significantly higher palm oil exports in September month so far, the market is sceptical of a further rise in palm oil stocks due to slow recovery in production,” he said.

Malaysia’s palm oil exports during Sept. 1-20 rose 38% to 1,089,071 tonnes from the same week in August, cargo surveyor Amspec Agri said. However, this was slower than a 54% monthly rise in Sept. 1-15.

Malaysia maintained its October export tax for crude palm oil at 8%, but raised its reference price to 4,472.46 ringgit per tonne, according to the Malaysian Palm Oil Board.

Favourable weather over the weekend boosted US harvest, while exports remain capped by terminals on the US Gulf Coast that continue to struggle with power outages and hurricane-led damage as the country heads into its busiest export season.

Soyoil prices on the Chicago Board of Trade were down 1.7%. The Dalian exchange is closed until Tuesday for a public holiday.

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