KUALA LUMPUR, May 28: Malaysian crude palm oil futures dropped nearly 4 per cent on Wednesday as weakening crude oil prices and lack of demand weighed on the market.

Today’s weakness is very much linked to crude oil, said one dealer with a domestic brokerage. And there is no big demand push which can support the prices. China and India are very quiet.” The benchmark August contract on the Bursa Malaysia Derivatives Exchange finished down 143 ringgit, or 3.83 per cent, at 3,587 ringgit per ton. Palm oil, used as a cooking oil and in products from biofuels to ice-cream, is 20 per cent below a record high of 4,486 ringgit a ton reached in March, as surging prices have slowed demand.

Other traded months fell between 44 and 167 ringgit. Traded volumes stood at 12,013 lots of 25 tons each.

Exports of Malaysian palm oil products for May 1-25 fell 2.36 per cent to 993,093 tons from a month ago period, cargo surveyor Intertek Testing Services said. China’s Dalian soyaoil September contract fell 1.38 per cent.

Global vegetable oil markets often tracks crude oil because of the growing use of edible oils to make biodiesel, which competes with petroleum diesel.

Dealers said the physical market was quiet with only a few deals reported. Buyers are not chasing, it is very dull here, said one trader with a domestic plantations house.

In the cash market, crude palm oil for June shipment in the southern region was quoted at 3,630/3,650 ringgit with trades done at 3,650 ringgit per ton.—Reuters