Malaysian palm oil futures fell to a seven-month low on Wednesday, dragged down by poor fundamentals and a stronger ringgit.
Palm oil has been on a downward trend since the beginning of June, posting three straight weekly falls and losing 9.2% so far this month.
The tropical oil has been recording losses, as traders forecast higher seasonal output in the coming months, while exports for June have fallen after they peaked in May ahead of Ramadan, contributing to rising stockpiles.
Benchmark palm oil futures for September delivery on the Bursa Malaysia Derivatives Exchange closed 2.3% lower at 2,323 ringgit (US$575) per tonne. They had earlier fallen to 2,317 ringgit, a level last seen on Dec 2, 2015.
Traded volumes stood at 59,150 lots of 25 tonnes each.
"Crude palm oil is down on ringgit strength and the prevailing supply and demand situation," said a trader in Kuala Lumpur. "Unless something major occurs which can disrupt that, palm will keep falling."
The ringgit had gained 0.9% to 4.0330 per dollar by Wednesday evening, making palm oil more expensive for foreign currency holders.
Malaysian exports for June are seen declining from the previous month, and will remain slow as the end of Ramadan approaches and until the next festive season of Diwali in October.
Soy's falling prices weigh on palm, as the commodity becomes more competitive as a substitute for palm.
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