28/11/2007 (The Economic News), Singapore - Palm oil in Malaysia, the global benchmark, fell for a third day on concern crude oil producers will increase supply, leading prices lower and reducing demand for alternative fuels.

Palm oil has gained 50 per cent this year, spurred by demand for use in food and soaps, as well as for bio-diesel. Crude oil fell to a one-week low of $93.72 a barrel on Wednesday on speculation that the Organisation of Petroleum Exporting Countries will agree next month to raise output.

Palm oil for February delivery, the most-active contract, fell 33 ringgit, or 1.1 per cent, to 2,952 ringgit (874 dollar) a metric tonne on the Malaysia Derivatives Exchange. It traded at 2,966 ringgit, 3.3 per cent lower than the record 3,068 ringgit set Nov 26.

OPEC President Mohamed Al-Hamli said in Singapore today that producers are pumping enough oil to meet global demand and may spend $50 billion to add 3 million barrels a day of refining capacity by 2012. Crude oil reached a record 99.29 dollar in New York on Nov 21.

Indonesia and Malaysia produce 90 per cent of the world's palm oil. It is the world's most consumed vegetable oil ahead of soybean oil and is used mainly for cooking and making soap. Like corn, rapeseed and soybean oil, it is increasingly used for making alternative fuels.