KUALA LUMPUR, Oct 8: Malaysian crude palm oil futures dived 5.1 per cent on Wednesday, dragged down by faltering crude oil and soyaoil markets, traders said.

The declines compound the vegetable oil’s biggest fall in 23 years on Monday with sentiment still weak as the biggest financial crisis since the Great Depression stretched its tentacles to Asia.

Palm oil itself is trading more than 60 per cent off record levels hit in March, thanks to bumper harvests and slowing demand amid a global investor flight from risky commodity asset classes.

The benchmark December contract on the Bursa Malaysia Derivatives Exchange fell as much as 95 ringgit to 1,755 ringgit ($502) per ton.

External factors are taking a hold of this market, adding to the problems of high end-stock levels and lacklustre demand, said a trader with a local brokerage.

Malaysia’s September palm oil stocks are likely to climb 9.3 per cent from a month earlier as output is expected to hit its highest level this year amid a pronounced slowdown in exports, a Reuters poll showed on Tuesday.

Oil prices fell $4 on Wednesday as the continuation of the global financial crisis heightened the anticipated decline in crude oil demand.

US soyaoil for October delivery edged higher in Asian trade although other contracts were sharply down. The most-active January soyabean oil contract on Dalian Commodity Exchange hit its limit down.—Reuters