It said inventories fell more than expected in February. Data from the Malaysian Palm Oil Board (MPOB) showed stockpiles fell 1.8% from January to a three-month low of 1.3 million tonnes.

This was the fifth straight month of declines, mainly due to labour shortages and adverse weather conditions.

“Production was lower compared with market estimates. Imports which saw a 47% month-on-month decline were way lower while domestic consumption was higher than expectations,” Marcello Cultrera, institutional sales manager & broker at Phillip Futures in Kuala Lumpur told Reuters.

According to MPOB, exports slumped 5.5% to 895,556 tonnes, their lowest since February 2007.

Paramalingam Supramaniam, a director at Selangor-based brokerage Pelindung Bestari, said the weakening ringgit was expected to boost demand in the second half of March.

The ringgit – palm’s currency of trade – fell 0.3% against the dollar today, making the commodity cheaper for holders of other currencies. The currency has lost 3% of its value so far this year.

Meanwhile, Bernama reported that Malaysia is in talks with Saudi Arabia to increase its imports to 500,000 tonnes from around 300,000 tonnes in the near future.