KUALA LUMPUR: Malaysian palm oil futures closed lower on Tuesday for a second consecutive session, hitting a near two-week low on fears of rising production.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange, which rolled over to a new month, closed down 54 ringgit, or 1.54%, to 3,458 ringgit ($779.71) a tonne, its lowest since May 3.

The market sees supply outlook in August to be much better, despite nearby tightness, where April stocks were at a 13-month low, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.

“Palm is now firmly under the thumb of bearish sentiment and hooked on rising production,” he said.

Exports from Malaysia during the May 1-15 period rose 4% from the same period in April, according to cargo surveyor Intertek Testing Services on Monday. AmSpec Agri Malaysia, another cargo surveyor, said exports rose 5.2%.

Top producer Indonesia set its crude palm oil reference price at $893.23 per tonne for the period of May 16-31, a trade ministry decree published on Monday showed.

Meanwhile, India, the world’s biggest edible oil buyer, slashed base import prices of crude palm oil and soyoil, the government said in a statement late on Monday.

Soyoil prices on the Chicago Board of Trade were down 1% amid forecasts of record US production. Dalian’s most-active soyoil contract fell 0.8%, while its palm oil contract lost 0.8%.

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