22/01/2008 (The Financial Times), Singapore - Palm oil futures in Malaysia, the global benchmark, had its biggest intra-day decline in seven months on concern a slowing global Economy may curb demand for vegetable oils used for food and fuels.

Palm oil, used mainly for cooking and making soaps, moves in tandem with soybeans, which are crushed for meal for animal feed and for cooking oil.

Record crude oil prices on January 3 helped boost vegetable oils to all-time highs as governments sought alternative fuels and ways to help the agricultural sector.

Crude oil dropped as low as 88.09 dollar a barrel, 12 per cent lower from the January 3 peak of 100.09 dollar.

April delivery palm oil on the Malaysia Derivatives Exchange, the most active contract, dropped 154 ringgit, or 4.8 per cent, to 3,089 ringgit (935 dollar) a ton. That’s 9.7 per cent off the record 3,420 ringgit reached on January 14, and the biggest intra-day decline since June 13. The contract ended at 3,110 ringgit.

Soybean futures for March delivery dropped 3.8 per cent on Tuesday on the Chicago Board of Trade in Asia. The most active contract is trading 3.7 per cent lower at 12.1675 dollar a bushel, the lowest since the year started.

Palm oil, the most-produced vegetable oil, historically trades at a discount to soybean oil. The discount widened to 8.84 cents a pound with Tuesday’s decline, according to a recent data. That’s the widest spread since July 17, 2006.