By Jae Hur Dec. 14 (Bloomberg) -- Palm oil slumped to the lowest level in more than a week in Malaysia as a drop in crude oil reduced demand for alternative fuels and on a report that China may sell stockpiled cooking oil. The tropical oil, used in for cooking oil and in biofuel, declined as much as 1.7 percent. China may sell vegetable oil from its stockpiles to curb recent price gains, the China Business News said, citing Guo Qingbao, editor in chief of the industry news Web site www.cnyouzhi.com. Crude slumped for a ninth day on concern that fuel and energy demand growth may slow. “The market has been following lower crude oil prices and soybean oil as well as soybeans,” Merlissa Paramitha Trisno, an analyst at PT Mandiri Sekuritas in Jakarta, said today by phone. “The China news also put pressure on the market” as the country is the world’s top buyer of vegetable oil, Trisno said. The February-delivery contract fell as much as 42 ringgit to 2,488 ringgit ($729) a metric ton, the lowest since Dec. 4, on the Malaysia Derivatives Exchange and was at 2,503 ringgit at the 12:30 p.m. break in Kuala Lumpur. The most-active contract tumbled 1.3 percent last week, the first weekly loss in six. Crude oil for January delivery dropped as much as 1.8 percent to $68.59 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $69.22 as of 12:36 p.m. in Singapore. A ninth day of losses would be the longest declining streak since July 2001. China Stockpiles China has 2 million tons of vegetable oil in stockpiles, enough to meet national demand for more than a month, the China Business News said, without citing anyone. Soybeans for January delivery dropped as much as 1.1 percent to $10.235 a bushel in electronic trading on the Chicago Board of Trade before trading at $10.30. The contract has lost 2.9 percent this month. March-delivery soybean oil fell as much as 1 percent to 39.61 cents a pound before trading at 39.76 cents. The premium of soybean oil in Chicago over palm oil in Malaysia widened to $142.9 a ton from $138.65 Dec. 11, according to Bloomberg data. Unilever suspended purchases from Sinar Mas Group until the Indonesian company “can provide verifiable proof that none of their plantations are contributing to the destruction of high conservation value forests and expanding onto peat lands,” the Rotterdam- and London-based company said in a statement Dec. 11. PT SMART, a unit of Jakarta-based Sinar Mas, provides about 5 percent of the palm oil the Anglo-Dutch company uses, Unilever spokesman Flip Dotsch said. Unilever will buy the oil from other Indonesian companies, he said, without giving names. The company said it aims to get 30 percent of the 1.5 million tons of palm oil it uses annually from traceable, certified sources in 2010, up from 15 percent this year. It currently chairs the Roundtable of Sustainable Palm Oil, which develops and implements standards for sustainable palm oil. Calls to the mobile phones of PT SMART president director Jo Daud Dharsono and Sinar Mas director Agustian Partawidjaja weren’t answered today. To contact the reporter on this story: Jae Hur in Tokyo at jhur1@bloomberg.net

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