The benchmark March contract on Bursa Malaysia Derivatives ended 2% lower at 2,418 ringgit a metric ton after falling as much as 2.1% to MYR2,416/ton.
A likely slowdown in shipments to China due to the country's stricter quality control measures fuelled expectations that palm oil exports could remain weak in January. China is the world's largest consumer of palm oil after India, buying more than 6 million tons of the oil annually from Indonesia and Malaysia.
China won't accept imports of edible oils containing excessive peroxide or stearic acid from Jan 1, China's Inspection and Quarantine Bureau said last year.
The market will get a better idea of the state of exports to the country when cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. issue Jan. 1-10 shipment data on Thursday.
Continued weakness in export demand could drag prices further down, as palm oil supplies in Indonesia and Malaysia remain at record levels, a broker in Jakarta said.
Malaysia's palm oil stockpiles at the end of November rose to an all-time high of 2.56 million tons. Top producer Indonesia doesn't release official data on stockpiles and production.
In the cash market, refined palm olein for January shipment was offered at $805/ton, while cash CPO was offered at MYR2,250/ton.
Open interest on the BMD was 167,047 lots vs 166,054 lots Friday. One lot is equivalent to 25 tons.
A total of 58,065 lots of CPO were traded versus 32,188 lots Friday.
Ending BMD Crude Palm Oil (CPO) futures prices in MYR/ton: Month Close Previous Change High Low Jan'13 2,320 2,369 -49 2,360 2,328 Feb'13 2,365 2,425 -60 2,425 2,363 Mar'13 2,418 2,467 -49 2,476 2,416 Apr'13 2,461 2,504 -43 2,510 2,4