KUALA LUMPUR, June 4: Malaysian crude palm oil futures fell 2.6 per cent on Wednesday as losses in the US crude oil market pushed investors to sell vegetable oils, heightening concerns of a demand slowdown.

Palm oil, which fell 3.5 per cent last week, has been struggling to recover as sales to traditional customers India and China have weakened, and rising production and easing crude oil prices have kept some investors on the sidelines.

The benchmark August contract on the Bursa Malaysia Derivatives Exchange settled down 90 ringgit at 3,440 ringgit ($1,061) per ton.

Palm oil has gone below 3,480-ringgit levels due to technical selling inspired by lower overseas markets, and there is nothing much to look forward to domestically, a trader with a foreign brokerage said.

Other traded months fell between 72 and 104 ringgit . Overall volumes stood at 11,327 lot levels.

Although palm oil is still the cheapest vegetable oil, demand has been slackening.

Exports of Malaysian palm oil products for May fell 6 per cent to 1,209,475 tons from 1,286,454 tons shipped in April, cargo surveyor Intertek Testing Services said on Saturday. Another cargo surveyor, Societe Generale de Surveillance said palm exports in May fell 3.8 per cent to 1,264,757 tons.

Oil on Wednesday fell below $124 a barrel to its lowest level in nearly three weeks after a fuel price rise in India, which is expected to curb demand. Vegetable oils were affected by crude oil’s overnight decline. Chicago Board of Trade soyabean oil futures July contract fell 0.7 per cent in Asian trade, extending sharp declines the previous day.

In Malaysia’s cash market, crude palm oil for June shipment in the southern region was quoted at 3,470/3,500 ringgit. Trades were done between 3,470 and 3,510 ringgit.—Reuters