Palm oil futures have shed more than a quarter of their value since the start of the year, set for their biggest annual drop since 2008, although analysts say prices should recover in 2013 as stocks begin to ease. "For next year, we see a rebound in crude palm oil prices back to 2,750 ringgit per tonne from the current weak position, with signs only expected to start kicking in when inventories are back to optimal levels," Malaysia's Public Investment Bank said in a research note.
China, the world's second largest edible oil buyer, will impose stricter quality measures on edible oil imports from January 1 onwards. The benchmark March contract on the Bursa Malaysia Derivatives Exchange dropped 0.4 percent to close at 2,341 ringgit ($766) per tonne. Prices traded in a tight range between 2,332 and 2,355 ringgit. Total traded volumes stood at 30,911 lots of 25 tonnes each, higher than the usual 25,000 lots.
Technical analysis showed palm oil faces resistance at 2,381 ringgit per tonne, and may revisit 2,285 ringgit, a high touched on December 14, said Reuters market analyst Wang Tao. Traders are hoping for Malaysia's crude palm oil export tax, set at zero percent for January, to spur shipments of the grade and bring down record stocks. In other vegetable oil markets, US soyoil for January delivery was almost flat in late Asian trade. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange edged up 0.1 percent.