Crude palm oil futures on Malaysia's derivatives exchange fell Thursday as investors booked profits following a recent rally.
The benchmark March contract on Bursa Malaysia Derivatives ended 1% lower at 2,475 ringgit a metric ton after moving in a MYR2,467/ton-MYR2,513/ton range.
"Palm oil futures had a good start in the morning, but it was evident that there was no follow-through buying interest," a vegetable oil exporter in Singapore said.
He added that sentiment remained cautious as investors are monitoring shipments of refined palm products to major palm oil consumer China, and if "these cargoes can meet the new stringent quality control rules set by Beijing."
From Tuesday, China won't accept imports of edible oils containing excessive peroxide or stearic acid.
Sentiment is likely to remain cautious, with the market tipped in a MYR2,400-MYR2,480/ton range as investors await export estimates for the first 10 days of January by cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd., due next week.
A fall in export demand could weigh on prices, as stock levels in major producers Indonesia and Malaysia remain at record levels. Malaysia's palm oil stockpiles at the end of November rose to an all-time high of 2.56 million tons.
In the cash market, refined palm olein for January shipment was offered at $815/ton, while cash CPO was offered at MYR2,280/ton.
Open interest on the BMD was 166,054 lots versus 173,649 lots Wednesday. One lot is equivalent to 25 tons.
A total of 36,244 lots of CPO were traded versus 33,431 lots Wednesday.
Ending BMD CPO futures prices in MYR/ton: Month Close Previous Change High Low Jan'13 2,364 2,382 -18 2,371 2,350 Feb'13 2,439 2,457 -18 2,460 2,422 Mar'13 2,475 2,501 -26 2,513 2,467 Apr'13 2,510 2,545 -35 2,557 2,505