NEW DELHI: Malaysian palm oil futures closed lower on Thursday due to a drop in overseas demand for the tropical oil from top buyers such as India and China.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was down 2.8% at 3,608 ringgit ($763.60) a metric ton at closing.

Palm oil futures dropped 6.06% on a monthly basis in September after posting two consecutive monthly gains. The Dalian Commodity Exchange is closed from Sept. 29 to Oct. 6 for the Mid-Autumn Festival and National Day. “We have seen poor demand from both China and India, and that’s the reason that prices have dropped,” said a New Delhi-based trader.

Edible oil imports by India, the world’s biggest buyer of cooking oils, fell 19% in September from August as refiners curtailed purchases by 26% after inventories jumped to a record. Soyoil prices on the Chicago Board of Trade were down 1.3%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Indonesia’s Palm Oil Association expects a 5% increase in the country’s output of the commodity this year and sees stocks at around 3.2 million metric tons by the year end. Exports of Malaysian palm oil products for September were seen rising between 5.4% and 8.1%, data from independent inspection company AmSpec Agri Malaysia and cargo surveyor Intertek Testing Services showed. Indonesia raised its crude palm oil reference price to $827.37 a ton for the Oct. 1-15 period, but kept export tax and levy for crude palm oil unchanged at $33 and $85 per ton, respectively.