KUALA LUMPUR, Sept 25: Malaysian crude palm oil futures closed down 2.5 per cent on Monday to their lowest levels in more than two months, dragged down by a decline in the prices of crude oil and soyaoil.

The benchmark third-month December contract on the Bursa Malaysia Derivatives exchange ended down 39 ringgit to 1,506 ringgit ($409) a ton.

The contract slipped more than 3 per cent in early trade to 1,498 ringgit on heavy liquidation.

Other traded contracts finished lower between 30 and 55 ringgit. Overall volume stood at 11,937 lots of 25 tons each.

“There was heavy liquidation in reaction to crude oil and soyaoil prices, said one dealer.

Vegetable oils like palm and soyaoil are increasingly tracking crude oil prices because of the rapidly expanding global biofuel industry.

Oil has slumped by more than $17 since early August, its biggest decline in over 15 years, amid easing concerns over Iran and an unexpectedly mild hurricane season.

October soyaoil on the Chicago Board of Trade closed 0.43 cent per lb weaker at 23.87 cents on Friday and December was off 0.48 at 24.22 cents.

In the physical crude palm oil market, September shipments were quoted at 1,490/1,495 ringgit a ton. Trades were done between 1,490 and 1,500 ringgit a ton.—Reuters