KUALA LUMPUR, Oct 2: Malaysian crude palm oil futures lost almost 2 per cent on Tuesday to hit a two-week low as softening prices of rival soyabean oil and crude weighed on the market.

The benchmark December contract on the Bursa Malaysia Derivatives Exchange finished down 49 ringgit, or 1.9 per cent, at 2,569 ringgit ($755) a ton, the lowest since Sept.20.

The market has clearly reacted to crude oil falling below $80 which will result into further decline in soyaoil, said one leading trader.

Dealers said the decline could prompt buying as the current price was attractive for refiners and importers who had been looking to lock supplies.

Other traded months fell between 11 and 50 ringgit in overall trade of 10,187 lots of 25 tons each.

Palm oil, used in products ranging from cosmetics to biofuel, is 7 per cent off an historic high of 2,764 ringgit reached in June.

Soyabean oil futures at the Chicago Board of Trade fell on Monday, pressured by big October deliveries, a lower close in Malaysian palm oil futures, and a $1.50 a barrel drop in crude oil.

October soyaoil settled 0.44 cent per lb weaker at 39.05 cents. The December contract fell 0.66 per cent to 39.37 cents per lb in electronic trade during Asian hours on Tuesday.

Oil slipped below $80 a barrel on Tuesday, retreating for a third day amid concerns about the strength of the world economy.

US crude fell 98 cents to $79.26 a barrel after dropping $1.42 on Monday.

The crude oil market often influences vegetable oil prices, including palm and soyabean, because of their growing use in making biodiesel, which competes with petroleum diesel.

December palm oil on Singapore’s Joint Asian Derivatives Exchange was untraded.

In the physical market, crude palm oil for October shipment in the southern region was quoted at 2,710/2,720 ringgit a ton. Trades were done between 2,715 and 2,720 ringgit a ton.—Reuters