BANGKOK, Aug 26: Malaysian crude palm oil futures fell 7.3 per cent to a one-week low on Tuesday as fears of defaults by Chinese buyers amid rising supply encouraged players to sell contracts heavily, traders said.

A broad decline in commodities, including crude oil and soyaoil, added to the pressure on palm oil, they said.

The benchmark November palm oil contract fell 191 ringgit, or 7.3 per cent, to finish at 2,409 ringgit ($710) per ton, the lowest since Aug. 19.

I think the market will be under tremendous pressure after news that Chinese buyers could default on deals, one trader said.

Chinese buyers have secured 150,000 tons of refined, bleached and deodorised palm olein in the past few days, but Chinese traders warned that further price falls could still lead to more defaults on purchases.

Malaysian palm futures have fallen nearly 45 per cent since a record high in March, which has led to defaults on purchases in China and India, the top two buyers of the vegetable oil.

September soyabean oil futures fell 3.32 per cent to 52.71 US cents per lb.

Indonesian crude palm oil prices dropped in line with the Malaysian market, traders said.

Crude palm oil prices at the state marketing centre’s auction in Jakarta fell 4.7 per cent to 6,668 rupiah a kg from 6,995 rupiah a kg on Monday.

Producers in Medan, North Sumatra — home to Belawan port, the country’s key port for palm oil exports -- sold crude palm oil at 6,540-6,650 rupiah a kg, down from 7,080-7,090 rupiah a kg on Friday. There was no auction on Monday.

In Jakarta, refiners offered refined, bleached, deodorised (RBD) palm olein -- used as cooking oil — at 7,450 rupiah a kg, down from 7,600 rupiah a kg on Monday.—Reuters