KUALA LUMPUR, Nov 17: Malaysian crude palm oil futures closed down 1.7 per cent on Monday as crude oil dropped to near its lowest level in almost two years, raising concerns over the viability of biodiesel demand amid a deepening global recession.

Although a package of economic measures by the G20 countries over the weekend sought to settle volatile markets and calm anxieties about leaders’ ability to work together, the proposals did little to alleviate investors’ fears.

The benchmark February contract on the Bursa Malaysia Derivatives Exchange settled down 25 ringgit ($6.96) to 1,435 ringgit per ton.

Export data from Intertek Testing Services showed there is some food demand from the big Asian importers but the market factored this in last week.

Exports of Malaysian palm oil products for Nov. 1-15 rose 11.30 per cent to 623,530 tons from 560,210 tons shipped between Oct. 1 and 15, cargo surveyor Intertek Testing Services said on Monday.

Another surveyor, Societe Generale de Surveillance, reported Nov. 1-15 exports rose 18.1 per cent to 649,071. Other traded months on the Bursa Malaysia fell between 17 and 62 ringgit.

Trading volumes shot up to 18,165 lots of 25 tons each from the usual 10,000 lots.

Vegetable oil prices generally track crude oil market moves due to use in biodiesel, which competes directly with petroleum diesel.

In Malaysia’s physical market, crude palm oil for both November and December shipments in the southern and central regions saw bids and offers at 1,410/1,420 ringgit.

Trades were done between 1,420 and 1,430 ringgit in the southern region and between 1,410 and 1,420 in the central region.—Reuters