"This is inevitable in light of stiffer competition from Indonesia - the world's largest palm oil producer - in its quest to flush out as much excess palm oil possible from its existing stockpile," Zuraida Kamaruddin said in a statement.
Malaysia's benchmark crude palm oil prices rallied to record levels earlier this year as Russia's invasion of Ukraine and a temporary export ban by Indonesia tightened global edible oil supply.
But prices plunged to their lowest in a year in recent weeks as Indonesia reversed an earlier decision to restrict exports.
Indonesia this month scrapped its export levy for all palm oil products until Aug. 31 following a series of attempt to boost exports and ease high inventories, and is also considering removing a domestic sales rule for exporters.
As a result, average crude palm oil prices for the third quarter are projected to range between 4,800 ringgit ($1,078.41) and 5,200 ringgit ($1,168.28) a tonne, also weighed by better production in Malaysia, Zuraida Kamaruddin said.
Prices are expected to rise to 5,000-5,500 ringgit per tonne in the fourth quarter with the resumption of the export levy in Indonesia and an expected decline in production, she added.
($1 = 4.4510 ringgit)
(Reporting by Mei Mei Chu; Editing by Ed Davies)
