KUALA LUMPUR: Malaysian palm futures eased on Wednesday after rising for two straight sessions, as a report highlighting the vegetable oil’s fading premium against rival oils weighed on prices.

Palm oil’s rare premium over rival rapeseed oil and sunflower oil is likely to be short-lived and should slip into a discount once top producer Indonesia eases export curbs after Ramadan, industry participants told Reuters on Tuesday.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange slid 15 ringgit, or 0.41%, to 3,672 ringgit ($834.17) a tonne by the midday break.

It gained 5% in the past two sessions.

Palm opened higher on Wednesday, borrowing strength from soybean oil and Dalian, but the market dropped sharply with heavy selling after breaking below 3,700 ringgit, a Kuala Lumpur-based trader said.

Dalian’s most-active soyoil contract rose 0.8%, while its palm oil contract gained 0.5%.

Soyoil prices on the Chicago Board of Trade were down 0.7%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Palm oil gains 3pc, hits one-week closing high

Top producer Indonesia plans to set its crude palm oil reference price for the April 1-15 period at $898.29 per tonne, Musdhalifah Machmud, a senior official at the Coordinating Ministry of Economic Affairs, said on Tuesday.

Production in the world’s second-largest producer is expected to decline after a miller’s association estimated a 22.9% decline in output during March 1-25, analysts said.

Exports from Malaysia during March 1-25 jumped between 11.4% and 19.8% from the same period in February, according to cargo surveyors’ data this week.

Palm oil may rise into a range of 3,773 ringgit to 3,810 ringgit per tonne to cover a gap forming on March 22, Reuters technical analyst Wang Tao said.