KUALA LUMPUR: Malaysian palm oil futures fell more than 1% on Tuesday, marking its second straight session of losses, dragged by weakness in rival oils and expectations of a decline in December exports.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange closed down 89 ringgit, or 1.86%, at 4,703 ringgit ($1,111.82) a tonne.

Palm futures tracked weakness in soyoil and Dalian palm oil prices, although spot prices are holding well, a Kuala Lumpur-based trader said.

The spot contract eased 2% but remained near an all-time high at 5,128 ringgit ($1,212.29) a tonne.

"Market may find it difficult to head lower as we are entering lower production season," the trader added.

Palm oil ends lower on weaker rivals, tightening Dec supply limits

The Southern Peninsula Palm Oil Millers' Association (SPPOMA) estimated production during Dec. 1-10 fell 2.8% from the same period in November, traders said on Monday.

Market talk has also pegged exports during the first half of December to decline 5.7% from the month before, according to traders. Cargo surveyors are scheduled to release their estimates on Wednesday.

Dalian's most-active soyoil contract fell 1.6%, while its palm oil contract slipped 1.7%. Soyoil prices on the Chicago Board of Trade were down 1%.

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

Oil prices dipped towards $74 a barrel after the International Energy Agency (IEA) said that the new Omicron coronavirus variant was set to dent the global demand recovery, making palm a less attractive option for biodiesel feedstock.