KUALA LUMPUR: Malaysian palm oil futures slipped more than 2% on Wednesday, ending a sharp two-day climb, although a forecast of shrinking stockpiles limited the losses.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed down 100 ringgit, or 2.52%, to 3,866 ringgit ($879.24) a tonne. The contract had risen 5.45% in the last two sessions.

Palm prices are expected to recover, supported by positive fundamentals and external markets, Refinitiv Commodities Research said in a note.

“Earlier, heavy rains and floods in Malaysia had resulted in weaker output, while Indonesia’s export restrictions prompted buyers to turn towards the Malaysian palm oil supply,” it said.

A Reuters survey forecast Malaysian stockpiles at end-March to plunge 16.3% from the month before to 1.77 million tonnes, its lowest since July.

Production rose nearly 2% to 1.28 million tonnes, while exports jumped 25% to 1.39 million tonnes, according to a survey published ahead of Malaysian Palm Oil Board data due next week.

India’s March palm oil imports jumped 28% from an eight-month low in February, as discounts on the tropical oil prompted refiners to curb purchases of soyoil and sunoil, five dealers told Reuters on Wednesday.

Meanwhile, the ringgit, palm’s currency of trade, rose 0.16% against the dollar, making the commodity more expensive for holders of foreign currency.

Soyoil prices on the Chicago Board of Trade were down 0.34%. The Dalian exchange was closed 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.