Crude palm oil futures on Malaysia's derivatives exchange ended lower Friday, weighed down by lower export demand and forecasts for improving weather in South American soy-growing regions.
Market participants said prices stayed in narrow ranges as investors moved to the sidelines and squared off positions ahead of the long weekend.
The benchmark April contract on Bursa Malaysia Derivatives ended 1.4% lower at 2,445 ringgits a metric ton after moving in a MYR2,442-MYR2,467 range.
Malaysia's exports of palm oil fell 14% to 1.10 million tons in the Jan. 1-25 period, cargo surveyor Intertek Agri Services said. Another surveyor, SGS (Malaysia) Bhd., said exports for the same period fell 15% to 1.10 million tons.
India announced Wednesday that it would set a base price of $802/ton for CPO imports in a bid to prevent a flood of cheap palm oil from top producers Indonesia and Malaysia.
"We are neutral on [India]'s news, as [recent declines in] CPO price should have priced this in previously," Alan Lim Seong Chun, an analyst at Kenanga Investment Bank, said. "In the long run, the new rule could prompt Indian refineries to use local CPO before importing from Malaysia and Indonesia."
Mr. Lim added that the major concern was Malaysia's ample inventories.
Tepid export demand could boost stockpiles to another all-time high at end-January.
Planters tip end-January stockpiles to reach 2.66 million-2.70 million tons.
In the cash market, refined palm olein for February shipment was offered at $820/ton, while cash CPO for prompt shipment was offered at MYR2,340/ton.
Open interest on the BMD was 185,630 lots, versus 181,117 lots Wednesday. One lot is equivalent to 25 tons.
A total of 35,486 lots of CPO were traded versus 50,452 lots Wednesday.
The market was closed for a holiday Thursday.
Ending BMD CPO futures prices in MYR/ton: Month Close Previous Change High Low Feb'13 2,383 2,410 -27 2,383 2,370 Mar'13 2,413 2,449 -36 2,436 2,409 Apr'13 2,445 2,479 -34 2,467 2,442 May'13 2,474 2,508 -34 2,495 2,470