could decline after the nation devalued its currency, and as prices of rival soyoil dropped.

The benchmark palm oil contract for October on the

Bursa Malaysia Derivatives Exchange lost 2.21 percent to 1,991

ringgit ($493.13) a tonne by the close.

Traded volume stood at 27,206 lots of 25 tonnes each, above

the roughly 13,500 lots usually traded by midday.

The ringgit, which has been the worst performing

emerging Asian currency so far in 2015, restricted the downside

as the benchmark palm is priced in the local currency, traders

said.

The local currency weakened past the psychologically

important 4 per dollar level as regional currencies lost ground

after China allowed the yuan to drop for the second straight

day.

"The devaluation of yuan will make imports expensive for

Chinese buyers and may affect demand," said Sandeep Bajoria,

chief executive officer of Mumbai-based Sunvin Group.

"The consistent drop in soyoil and crude oil is also pushing

palm lower."

U.S. soyoil futures were down 1.26 percent, while the

most active soybean oil contract on the Dalian

Commodity Exchange gained 1.22 percent.

Oil prices steadied on Wednesday after an upbeat report from

the IEA balanced the bearish impact of a further weakening of

the yuan and disappointing Chinese industrial output data.

Data released on Monday showed a build-up in Malaysia's July

palm oil stocks to 2.27 million tonnes due to higher production

and a slowdown in demand after the Muslim holy month of Ramadan.

"Buyers are waiting for prices to stabilise. They are

postponing purchases," said a Mumbai-based trader.

Last week the benchmark palm oil contract marked its longest

weekly losing streak in seven years, after sliding to its lowest

since September on Thursday.

Wang Tao, a Reuters market analyst for commodities

technicals, said palm oil may break a support at 2,017 ringgit

per tonne and fall into a range of 1,963-1,997 ringgit.

Palm, soy and crude oil prices at 1039 GMT

Contract Month Last Change Low High Volume

MY PALM OIL AUG5 0 -47.00 0 0 0

MY PALM OIL SEP5 1985 -44.00 1984 2023 2599

MY PALM OIL OCT5 1991 -45.00 1991 2035 27206

CHINA PALM OLEIN JAN6 4674 +54.00 4596 4678 795250

CHINA SOYOIL JAN6 5662 +68.00 5556 5662 806346

CBOT SOY OIL DEC5 30.16 -4.70 29.93 30.50 13134

INDIA PALM OIL AUG5 392.50 -4.70 390.90 397.80 1354

INDIA SOYOIL AUG5 578.90 +1.55 576.40 580.50 15510

NYMEX CRUDE SEP5 43.84 +0.76 42.80 43.87 57879

Palm oil prices in Malaysian ringgit per tonne

CBOT soy oil in U.S. cents per pound

Dalian soy oil and RBD palm olein in Chinese yuan per tonne

India soy oil in Indian rupee per 10 kg

Crude in U.S. dollars per barrel

($1 = 4.03 ringgit)