KUALA LUMPUR, Jan 29: Malaysian crude palm oil fell 2.1 per cent to more than three-week lows on Thursday, pressured by weak crude and slowing shipments, although traders said drought hurting South American soyoil could spur demand.

Palm oil, used in products ranging from biscuits to biofuel, have soared by a third from an Oct. 28 low of 1,331 ringgit thanks to falling domestic stockpiles but have failed to stay above 1,800 ringgit due to volatile crude markets and long Lunar New Year holidays.

The market is very quiet for the holidays, palm producers only enter the market in the mornings and then get out in the afternoon, said a trader with a foreign commodities brokerage.

The benchmark April contract on the Bursa Malaysia Derivatives Exchange closed down 37 ringgit to stand at 1,745 ringgit ($484.8), a level unseen since Jan. 5, Other traded contracts fell between 17 and 41 ringgit .

Overall volume slumped to 6,982 lots of 25 tons each from about 10,000 lots as many traders were still away for Lunar New Year following market closures on Monday and Tuesday.

Exports of Malaysian palm oil products for Jan. 1-25 fell 29.2 per cent to 952,478 tons from 1,345,325 tons shipped between Dec. 1 and 25, cargo surveyor Intertek Testing Services said on Wednesday. Another cargo surveyor, Societe Generale de Surveillance, reported declines of 24.1 per cent to 1,016,477 tons.

In Indonesia, the world’s largest palm oil producer, the state marketing centre said it sold the entire 5,500 tons of palm oil it offered in an auction at a top price of 6,128 rupiah ($0.54) per kg.

The centre, which normally sells palm oil from state plantations, did not hold a palm oil tender on Wednesday.

Producers in Medan -- home to Belawan port, Indonesia’s key palm oil export port -- sold palm oil at 6,126 rupiah per kg, against 6,190-6,197 rupiah per kg on Wednesday.

Meanwhile, refiners in Jakarta sold refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 6,650 rupiah per kg, unchanged from Wednesday.—Reuters