By Claire Leow Jan. 20 (Bloomberg) -- Palm oil declined to near an eight- week low after a drop in crude oil reduced its appeal as an alternative in biofuel applications. Prices fell as much as 1.4 percent after oil dropped in New York on concern China may step up efforts to curb credit growth and on a forecast stockpiles in the U.S. will increase. “Palm oil weakness today is due to concerns that oil’s rally cannot be sustained,” said Nirgunan Tiruchelvam, a plantation analyst for Royal Bank of Scotland Asia Securities (Singapore) Pte. April-delivery palm oil dropped 1.1 percent to 2,463 ringgit ($735) a metric ton on the Malaysia Derivatives Exchange at the 12:30 p.m. trading break. Crude oil lost 0.8 percent to $78.38 a barrel declined 47 cents, or 0.6 percent, to $78.85. Yesterday, the February contract gained 1.3 percent to settle at $79.02. March-delivery soybeans in Chicago dropped as low as $9.6175 a bushel, the lowest in intraday trade since Nov. 12. The contract was trading unchanged at $9.635. World soybean production in the crop year that began Oct. 1 will be a record 253.4 million tons, up from 210.9 million last year, the U.S. Department of Agriculture said Jan. 12. Soybean Oil Soybean oil for March delivery was little changed at 37.19 cents a pound at 12:34 p.m. Singapore time. Soybean oil is about $85 a ton more expensive than palm oil, down from a 12-month average of $154, according to Bloomberg data. In China, soybeans for September delivery in Dalian lost 1.1 percent to 3,879 yuan ($568) a ton at the 11:30 a.m. trading break, after falling as low as 3,868 yuan earlier, the lowest in intraday trade since Nov. 27. To contact the reporter on this story: Claire Leow in Singapore at cleow@bloomberg.net

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