Malaysian palm oil futures finished lower on Tuesday, extending losses to a second consecutive session, as weaker rival vegetable oils weighed on prices.

The benchmark palm oil contract FCPO1! for May delivery on the Bursa Malaysia Derivatives Exchange slid 77 ringgit, or 1.8%, to 4,206 ringgit ($940.94) by the end of trading on Tuesday.

Dalian’s most-active soyoil contract (DBYcv1) fell 1.03%, while its palm oil contract (DCPcv1) lost 1.51%. Soyoil prices on the Chicago Board of Trade (BOcv1) were down 0.36%.

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

“Physical prices are higher than the exchange traded values, as the physical market is experiencing supply tightness due to lower production at the moment,” market sources said.

“We might see more exports coming from Malaysia due to Indonesia’s Domestic Market Obligation (DMO) regulations, alongside higher levies and duties on palm exports,” they added.

The Asian Palm Oil Alliance (APOP), a body of palm oil buyers, want producing countries to make sure they have stable export policies after changes last year caused volatility in the trading of the tropical oil, the head of the group said.

Malaysia’s biodiesel exports in 2023 are expected to fall to a six-year low of 300,000 tonnes due to the European Union’s decarbonisation plans, the Malaysian Biodiesel Association (MBA) said on Tuesday.

India’s palm oil imports could jump 16% in 2022/23 to a four-year high of 9.17 million tonnes, as consumption is set to jump after two years of contraction due to COVID-led lockdowns, Sudhakar Desai, president of the Indian Vegetable Oil Producers’ Association told Reuters on Tuesday.

India, the world’s biggest importer of vegetable oils, is considering raising its import duty on palm oil to help support local farmers reeling from a crash in domestic rapeseed prices, government and industry officials said on Monday.

The European Union’s deforestation law is unlikely to have a meaningful impact on demand for Southeast Asian palm oil as the surplus is shrinking amid rising consumption from developing countries, James Fry, chairman of commodities consultancy LMC International said on Monday.

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