KUALA LUMPUR, June 27: Malaysian crude palm oil futures fell 0.6 per cent on Wednesday, extending losses since last week as lower prices of rival soyaoil and expectations of swelling reserves due to weak demand weighed on the market.

The benchmark September contract on the Bursa Malaysia Derivatives Exchange settled down 14 ringgit, or 0.6 pc, at 2,334 ringgit ($670) a ton after reaching an intra-day low of 2,315 ringgit.

The perception is that demand will fall further and production will be maintained, leading to an increase in stock, said a trader. And it is really bringing down the market along with overnight losses in soyaoil.

Other traded months fell between 6 ringgit and 25 ringgit except for the September 2008 contract, which was marginally up.

Overall trade slipped to 8,332 lots of 25 tons each from the 12,000 lots that change hands on a routine day.

Palm oil is almost 16 per cent off a historic high of 2,764 ringgit reached earlier this month due to robust demand from top importers India and China and dwindling stocks at home.

September palm oil on Singapore’s Joint Asian Derivatives Exchange slid $6 at $672.50 a ton with distant months mixed in light trade.

Indonesia is likely to maintain an export tax on palm oil at 6.5 per cent for the next 2-3 months to see its effectivness in lowering local prices, Bayu Krisnamurthi, deputy to the chief economics minister, said.

The Southeast Asian nation recently raised the export tax on crude palm oil to 6.5 pc from 1.5 pc and palm oil by-products to 6.5 pc from 0.3 pc to ease local prices.—Reuters