JAKARTA, Aug 5: Malaysian crude palm oil futures dived as much as 6.6 per cent to hit fresh nine-month lows on Tuesday as weak crude oil markets and high stock levels battered sentiment.

China’s Dalian soyaoil fell by its daily limit as rising domestic supplies weighed on the market against the backdrop of a broad-based sell off in commodities.

The benchmark October contract on the Bursa Malaysia Derivatives Exchange ended down 4.8 per cent, or 140 ringgit, at 2,750 ringgit ($851) per ton, after going as low as 2,700 ringgit, a level unseen since Oct. 25, 2007.

Contracts for other traded months also fell 103 ringgit and 146 ringgit. Overall volume stood at 12,653 lots of 25 tons.

Prices of palm oil have plummeted 23 per cent in the past three weeks, dragged down by faltering vegetable oil markets from the United States to China and difficulties increasing palm oil shipments to soak up surplus stock.

China has bought about 400,000 tons of soyaoil and up to 1 million tons of soybeans for its reserves, in an effort to further dampen domestic prices and keep inflation in check, traders said last week.

Comments by Malaysia’s Commodities Minister Peter Chin on a plan to use 500,000 tons of crude palm oil from its swelling inventories in the next two to three months to produce biodiesel to boost faltering prices of palm oil had little impact on the market as it’s a long term plan, the dealer said.

Malaysia’s crude palm oil stocks rose 6.38 per cent to a new 25-year high of 2.04 million tons in June. Industry players expect July’s stock levels will hover close to record levels, a Reuters poll showed. Falling crude oil market also dragged down shares of Malaysian planters.

Shares of Malaysian planters plummeted as well. Sime Darby the world’s largest listed palm oil firm, dived 3.9 per cent while IOI Corp sank 9.1 per cent, dragging the broader market 1.7 per cent lower.

Palm oil producers in North Sumatra’s Medan — home to Belawan port, which is the key port for palm oil exports -- sold crude palm oil at 7,025-7,150 rupiah ($0.774-$0.853) a kg, from 7,884 rupiah a kg last week.

In Malaysia’s physical market, August crude palm oil was offered at 2,750/2,780 ringgit in the southern and central region. Trades were done at 2,770-2,780 ringgit at southern region and 2,735-2,760 ringgit at the central region.—Reuters