JAKARTA, Dec 19: Malaysian palm futures dropped for second day to its weakest level in two weeks, after crude oil touched fresh 4-1/2 year low as demand gloom offset Opec’s record supply cut.

The benchmark March palm oil contract on the Bursa Malaysia’s Derivatives Exchange closed down 9 ringgit, or 0.58 per cent, at 1,536 ringgit ($443) per ton.

Other traded contracts were mostly lower, falling between 2 ringgit and 60 ringgit. Overall volume stood at 9,562 lots of 25 tons each.

Palm was pressured by crude oil as well as some speculative selling as people are anticipating that palm is heading to 1,460 ringgit next week, a trader at a Malaysian brokerage said.

He said expectations of stronger exports this month has helped to keep palm futures above 1,500 ringgit this week.

Palm oil tends to track crude oil moves as rival vegetable oils such as rapeseed and soyaoil are increasingly used as a feedstock for biodiesel.

US light crude for January delivery, which expires later on Friday, was down 51 cents at $35.71 a barrel by 1108 GMT.

In Indonesia, the world’s largest palm producer, the Jakarta-based state marketing centre said it did not hold a palm oil auction on Friday due to lack of stocks.

The centre normally sells palm oil from state plantations.

Producers in Medan -- home to Belawan port, Indonesia’s key port for palm oil exports -- sold palm oil at 5,087 rupiah ($0.47) per kg, down from 5,200 rupiah per kg on Thursday.

Refiners in Jakarta sold refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 5,700-,5750 rupiah per kg, down from 5,800 rupiah per kg on Thursday.—Reuters