JAKARTA: Malaysian palm oil futures plunged by more than 4% on Wednesday, shedding sharp gains from the previous session after a fall in soyoil prices on an improved weather outlook for the US Midwest crop belt.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange closed 4.1% lower, to 3,398 ringgit a tonne.

"Palm oil prices are tracking weakness from external markets," a Kuala Lumpur-based trader said, referring to palm's rival oils on the Chicago Board of Trade (CBOT) and the Dalian Commodity Exchange.

Soyoil contract on the CBOT fell 2.4%. Soybean oil prices on the Dalian dropped 1.9%, while its palm contract fell 1.6%.

Lower demand from India after it did not lower import duties as it had been expected to also weighed on prices, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.