KUALA LUMPUR, July 12: Malaysian crude palm oil futures closed down sharply on Wednesday, with the benchmark third month contract falling below the key support level of 1,500 ringgit because of lack of buying and higher stocks.

There is more liquidation taking place, stocks are very high and not much of demand is coming in, one dealer said.

Traders said strong demand from Chinese and European buyers, seen last week, had died down.

The benchmark third-month September contract on the Bursa Malaysia Derivatives ended down 1.5 per cent, or 22 ringgit, at 1,491 ringgit ($408) a ton.

Stocks of palm oil at the close of last month totalled 1,645,839 tons, up 4.60 per cent from end-May because of lower exports, Malaysian Palm Oil Board, the industry's regulator, said on Monday.

Exports of palm products for July 1-10 stood at 356,093 tons, up 0.7 per cent from 353,636 tons shipped between June 1 and 10, according to cargo surveyor Societe Generale de Surveillance.

In the physical palm oil market, traders were offering crude palm oil for July shipment at 1,440 ringgit a ton, with bids seen at 1,437.50.

Trades were done at 1,435 to 1,442.50 ringgit a ton.—Reuters