Crude palm oil futures on Malaysia's derivatives exchange fell Friday, pressured by technical-driven selling and forecasts for higher palm oil stockpiles at the start of next year.
Declines however, were limited by a rebound in November exports, market participants said.
The benchmark February contract at Bursa Malaysia Derivatives ended 0.7% lower at 2,370 ringgit a metric ton after moving in a MYR2,359-MYR2,391 range.
Palm oil exports from the world's no. 2 producer Malaysia rose 5.2% from the previous month to 1.65 million tons, according to cargo surveyor SGS (Malaysia) Bhd. Another cargo surveyor Intertek Agri Services put November shipments at 1.66 million tons, an increase of 3.8%.
"The rise in export numbers could help to prevent further stock-builds. We believe November stockpiles could be around 2.60 million tons" compared with previous estimates of 2.65 million-2.70 million tons, a trading executive at a Kuala Lumpur-based brokerage said.
Palm oil prices could recover to MYR2,500/ton by March next year, said Sabri Ahmad, chief executive at Felda Global Ventures, Malaysia's fourth-largest plantation company by market capitalization.
"Prices have eased to a level that is low enough to attract buyers," Mr. Sabri said. Mr. Sabri's remarks mirrored comments by leading oilseed analyst Thomas Mielke, who predicted earlier in the day at an industry conference on the Indonesian island of Bali that CPO will rise to MYR3,200 as "the world needs more palm oil to offset the reductions [in output of other types of vegetable oil]."
In the cash market, refined palm olein for December was offered at $790/ton, while cash CPO for prompt shipment was offered at MYR2,140/ton.
Open interest on the BMD was 162,347 lots, versus 167,282 lots Thursday. One lot is equivalent to 25 tons.
A total of 20,776 lots of CPO were traded versus 24,134 lots Thursday.
Ending BMD CPO futures prices in MYR/ton: Month Close Previous Change High Low Dec'12 2,145 2,170 -25 2,156 2,128 Jan'13 2,302 2,320 -18 2,325 2,293 Feb'13 2,370 2,386 -16 2,391 2,359 Mar'13 2,424 2,436 -12 2,441 2,414