Palm oil fell as exports from Malaysia, the second-largest producer, declined in the first 20 days of March after a rally in prices curbed demand from importers in India and China.

The most active June-delivery contract dropped as much as 0.9 percent to 3,416 ringgit ($1,124) per ton and traded at 3,432 ringgit at 5:52 p.m. in Kuala Lumpur. The contract had earlier gained as much as 1.3 percent. Futures gained 2.4 percent last week.

“Export numbers continue to look weak,” Bernard Ching, an analyst at ECM Libra Capital, said in a report on Monday.

“We believe that high crude palm oil prices continue to dampen buying prospects and a prolonged hold-off in demand for palm oil should cause prices to weaken further.”

Malaysia’s palm oil exports fell 12.8 percent in the first 20 days of March to 719,302 tons from a month ago, surveyor Intertek said. Shipments slumped 9.5 percent in the same period.

Indonesia may cut its crude palm oil export tax to 22.5 percent in April from 25 percent this month, Steaven Halim, second secretary at the Indonesian Palm Oil Association, said on Monday. Indonesia may also lower the base price for April palm oil exports to $1,140 per ton from $1,222 per ton, he said.

Palm oil reached a 35-month high of 3,967 ringgit on Feb. 10 after heavier-than-usual rains in the last quarter of 2010 disrupted harvesting in Indonesia and Malaysia, the largest producers. Futures have since fallen 13 percent on speculation of an increase in output this year as yields improve and the La Nina weather event fades.

Demand from China and India, the biggest consumers of palm oil, has started to pick up as the cold season is over, said Vijay Mehta, director at Commodity Links. The tendency of palm oil to cloud over in winter cools demand, prompting users to switch to soybean oil.

China’s palm oil imports in February were little changed from a month ago at 332,495 tons, the customs agency said in a statement.