KUALA LUMPUR: 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 percent 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 Ramazan, contributing to rising stockpiles.

Benchmark palm oil futures for September delivery on the Bursa Malaysia Derivatives Exchange closed 2.3 percent lower at 2,323 ringgit ($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 percent 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 Ramazan approaches and until the next festive season of Diwali in October.

Palm oil shipments from Malaysia fell about 10 percent in June 1-25 versus May 1-25, showed cargo surveyor data. Data for the full month is scheduled to be out on Thursday.

The Chicago Board of Trade soyaoil contract for December fell 0.6 percent, while the September soyabean oil contract on the Dalian Commodity Exchange dropped 0.1 percent, on a US government report showing increased acreage for soyabean crops this year.

Soya’s falling prices weigh on palm as the commodity becomes more competitive as a substitute for palm. Palm oil may drop to 2,017 ringgit per tonne in the next three months, as it has broken a support at 2,390 ringgit, according to Reuters market analyst for commodities and energy technicals Wang Tao.—Reuters