The benchmark April contract on the Bursa Malaysia Derivatives Exchange dropped 27 Malaysian cents to 2,463 ringgit ($735.9) per tonne. Overall volume more than doubled to 11,573 lots of 25 tonnes each. "China is still buying some palm oil, but traders are blocking out that fact because of China tightening credit and the high stocks in Malaysia," said a trader with a foreign commodities brokerage.
Stocks in the world's No 2 palm oil are supposed to fall from December onwards but plantations in top producer Indonesia shipped cargoes over last month to escape January's 3 percent export tax, traders say. Cargo surveyor Intertek Testing Services reported on Wednesday a 7.7 percent rise in Malaysia's January 1-20 palm oil exports compared to the same period a month ago.
Although orders from China slowed slightly, top vegetable oil importer India more than doubled its cargoes. The stronger dollar weighed on crude oil and other vegetable oil markets. US soyoil for March delivery edged higher after posting losses the day before.
The most-active September soybean oil contract on China's Dalian Commodity Exchange dropped 1.2 percent but a Shanghai-based analyst said there may be a rebound soon. "Despite the cold weather that would probably affect the transportation of edible oil before the Lunar New year, the gloomy market may see a rebound as the demand of beanoil outweighs palm oil," he said.