Palm oil has been increasing in price for the second day due to slow production growth and a weak ringgit.

Malaysian palm oil futures are rising for the second consecutive session on Wednesday, driven by the growth in exports in the first half of August, production concerns, and the weakening ringgit.

The contract for benchmark palm oil for delivery in November on the Bursa Malaysia Derivatives Exchange rose by 1.3 ringgit, or 0.34%, to 3,818 ringgit ($823.02) per metric ton by midday.

The weakening ringgit and slower production growth in the first half of August on the Malaysian peninsula have been catalysts for recent price increases, said Paramalingam Supramaniam, the director of brokerage firm Pelindung Bestari from Selangor.

He also mentioned preliminary reports indicating a forecast of hot and dry weather in many regions of Indonesia.

“In short, the market is in a consolidation phase, and if we don’t see a significant improvement in production, prices will continue to remain supportive,” Paramalingam said.

Indonesia’s largest producer lowered the indicative price of crude palm oil (CPO) to $820.35 per metric ton for the period from August 16 to 31, essentially maintaining CPO tax and levy at an unchanged level, according to a trade ministry decree.

Exports from Malaysia for the period from August 1 to 15 increased by 18.9% compared to the same period in July, as reported by surveying company Intertek Testing Services on Tuesday. Another surveyor, Amspec Agri, reported a surge of 24.2% in exports.

The ringgit continues to decline against the dollar for the fifth consecutive day, making the commodity cheaper for buyers holding foreign currency.

The most active Dalian contract for soybean oil added 0.5%, while the palm oil contract jumped by 2%. Soybean oil prices on the Chicago Mercantile Exchange rose by 0.5%.

Palm oil is influenced by fluctuations in prices of related oils as they compete for market share in the global vegetable oils market.

According to Reuters’ technical analyst, Wang Tao, palm oil appears neutral in the range of 3,778 to 3,861 ringgit per metric ton.