The benchmark April contract on the Bursa Malaysia Derivatives Exchange settled down 33 ringgit to 2,455 ringgit ($723.1) a tonne. Traded volumes nearly doubled to 18,676 lots of 25 tonnes each from the usual 10,000 lots. "The declines in palm oil and other vegetable oil markets were just a reaction but should be a recovery next week as the market is still oversold," a trader with a foreign commodities brokerage said.
Domestic fundamentals in Malaysia, the world's No 2 palm oil supplier after Indonesia, may not help the recovery, some traders say. Malaysia's December stocks rose to 13-month high as plantations in Indonesia shipped in cargoes to escape an export tax that falls in January. Export growth has slowed in the first 20 days of January.
Key palm oil buyer China has slowed purchases ahead of the Lunar New Year as port stocks are above 350,000-400,000 tonnes after heavy buying in the last two months of 2009, Asian vegetable oil traders said on Friday. Other vegetable oil markets were mixed in Asian trading. US soyoil slipped and the most-active September soybean oil contract on China's Dalian Commodity Exchange reversed earlier losses, climbing 1 percent.
INDONESIA PALM OIL TRADES In Indonesia, Jakarta-based PT KBN Nusantara, formerly known as the state marketing centre, did not hold any auction on Friday due to lack of stocks. Producers in Medan, home to Indonesia's main palm oil export port of Belawan, sold palm oil at 7,170 rupiah ($0.771) per kg. Refiners in Jakarta offered refined, bleached, deodorised (RBD) palm oil, used as cooking oil, sold at 7,700 rupiah per kg, rose from previous day at 7,600 rupiah per kg.