KUALA LUMPUR (Reuters) – Malaysian palm oil inventories likely tumbled to its lowest since June 2017, as dry weather and lower fertiliser usage in the second largest palm producer early last year suppressed output to near four-year lows, a Reuters surveyed showed.

January stockpiles in Malaysia are forecast to fall 12% to 1.76 million tonnes from December, the lowest in two and a half years, according to a median estimate of nine planters, traders and analysts polled by Reuters.

Production also likely dropped 9% to 1.21 million tonnes from the month before, its lowest since March 2016.

“Output fell on a combination of lower harvesting and milling activities due to the Lunar New Year holidays,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.

Meanwhile, January exports likely plunged 8.2% month-on-month to 1.28 million tonnes as Malaysia faced lower purchases from its biggest customers India and China.

Malaysia’s monthly palm exports to India fell to about 40,500 tonnes compared to 201,450 from the year earlier, after the world’s largest consumer of vegetable oils restricted imports of refined grades and informally stopped all purchases from Malaysia over a diplomatic row.

On Tuesday, Pakistan said they will import more Malaysian palm oil to help offset the lost sales to India, but traders said that would not fully compensate.

“Pakistan’s edible oil consumption is around 4.50 million tonnes while India consumes 24 million tonnes; the scales are too wide,” Sathia said.

Exports to China also saw a decline as the coronavirus epidemic raised fears of a sustained disruption in supply chains and eating habits in the world’s most populous nation.

However, the crude palm oil market appears to be more concerned over supply shortfall than potential demand rationing due to slower global growth from the virus outbreak, Ivy Ng, regional head of plantations research at CIMB Investment Bank said in a research note.

The benchmark palm oil contract for April last climbed 2.3% to 2,730 ringgit ($662.46) on Wednesday.

Official palm oil data will be published by the Malaysian Palm Oil Board on Jan. 10.

The median results from the Reuters survey put Malaysia’s consumption in January at 258,977 tonnes.