KUALA LUMPUR: Malaysian palm oil futures dropped more than 3% on Tuesday as the market reopened after the Eid holidays, down for a third consecutive session to hit a more than one-week low.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange slid 102 ringgit, or 2.75%, to 3,603 ringgit ($811.12) a tonne by the midday break. It fell as much as 3.86% during early trade.

“The broader weakness in soft oils has forced palm oil to trade lower as the palm oil is still seen at premium over competing soft oils,” said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

Palm oil may retrace to 3,680 ringgit

Bagani said the market is also expecting top producer Indonesia to revert its domestic market obligation policy - which requires a percentage of its palm oil to be sold domestically - back to pre-Ramadan quotas.

Indonesia palm oil export levies and export duties for May 1-15 period is also expected to decline, he added.

Cargo surveyors are scheduled to release April 1-25 export data for Malaysia later in the day.

Shipments during April 1-20 fell 25.8% from a month earlier, independent inspection firm AmSpec Agri Malaysia reported last week, while cargo surveyor Intertek Testing Services reported a 20.3% decline.

Malaysia’s exports of palm oil and palm-based products to China are expected to increase this year following better cooperation between the two countries, the Malaysian Palm Oil Board said.

Dalian’s most-active soyoil contract fell 0.6%, while its palm oil contract eased 0.7%.

Soyoil prices on the Chicago Board of Trade were up 0.1%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Palm oil may break a support at 3,680 ringgit per tonne, and fall into a range of 3,601 to 3,637 ringgit, Reuters technical analyst Wang Tao said.