KUALA LUMPUR, April 18: Malaysian crude palm oil futures fell 2 per cent on Wednesday, extending losses as rival soybean oil declined and the ringgit strengthened against the dollar.

The benchmark third-month July contract on the Bursa Malaysia Derivatives Exchange ended down 43 ringgit at 2,160 ringgit ($630) a ton, after hitting a low of 2,154 ringgit.

The market is down today because of the slide in soybean oil prices, one dealer said. Also, the stronger ringgit is contributing to the decline in prices. But traders said the market would remain healthy because of the strong global demand for edible oils and tight supplies at home.

Right now, the market is going through a healthy correction but it will be supported by strong exports and weak supplies, said another trader.

Malaysian palm oil has gained more than 8 per cent this year despite falling since Tuesday.

The commodity surged 40 per cent last year, boosted by biodiesel demand, and analysts expect the market to rise around 20 per cent this year.

But Hamburg-based oilseeds analysts Oil World said palm oil prices are likely to fall as current high levels will make it less attractive especially for biofuel production.

Other traded months fell between 25 and 48 ringgit in overall trade of 19,853 lots of 25 tons each. The Chicago Board of Trade soyaoil futures fell in electronictrading during Asian hours. May soyaoil shed 0.22 cent to 31.65 cents a lb.

Malaysian palm oil often tracks the US soyaoil market because both commodities are used in products ranging from food and cosmetics to biodiesel.

A stronger ringgit against the dollar makes the ringgit-based commodity more expensive for overseas buyers.

Malaysia's exports are picking up after months of slowdown because of strong demand from the world's top buyers, China and India. Exports of Malaysian palm oil products for April 1-15 rose 47 per cent to 666,793 ton from 454,791 tons shipped between March 1 and 15, cargo surveyor Intertek Testing Services said.

Another cargo surveyor, Societe Generale de Surveillance, said exports during the period rose 29.3 per cent to 642,492 tons from a month ago.

Malaysia's end-March palm oil stocks fell 10.6 per cent to 1.34 million tons while exports jumped almost 30 per cent during the month and production failed to keep pace, the Malaysian Palm Oil Board said.

Traders said refiners in southern and central Malaysia were facing shortages because of a sharp fall in imports from neighbouring Indonesia.

They estimated Malaysia's palm oil imports from Indonesia in January and February slipped to around 37,000 tons from about 300,000 during the corresponding months in 2006.

In the physical market, crude palm oil for April shipment in the southern region was quoted at 2,275/2,285 ringgit a ton.

Deals were done at 2,270 to 2,275 a ton.—Reuters