KUALA LUMPUR: Malaysian palm oil futures dropped in first-half trade on Friday and were headed for their first session of fall in three, tracking weaker rival oils on the Chicago Board of Trade (CBOT) and China's Dalian Commodity Exchange.
Also, weighing on sentiment were forecasts of higher output in Indonesia, the world's top producer of palm.
Benchmark palm oil futures for February delivery on the Bursa Malaysia Derivatives Exchange were down 0.8 percent at 2,852 ringgit ($647) a tonne at the midday break. They had declined 3.3 percent this week as of Thursday's close after gaining 8.7 percent in the previous week.
Traded volumes stood at 18,326 lots of 25 tonnes each.
Palm was down tracking weaker rival oils, said one trader from Kuala Lumpur.
Another trader based in East Malaysia said the market fell due to higher production forecasts in Indonesia and "lacklustre exports" from Malaysia.
Indonesia's crude palm oil output likely rose for a sixth month in October, increasing by 5.6 percent to 3.06 million tonnes, according to a Reuters poll of three industry associations and a state palm research firm.
Malaysian shipments of palm oil declined in the first half of November by 17-19 percent from the same period a month ago, according to data from cargo surveyors.
Palm prices track the performance of related vegetable oils such as rival oilseed soy, as they compete for a share in the global edible oils market.
The December soybean oil contract on the CBOT fell 0.6 percent, while the January soybean oil contract on the Dalian Commodity Exchange declined 0.5 percent.
In related vegetable oils, the January contract for palm olein on the Dalian Commodity Exchange was down 0.6 percent.
Palm oil looks neutral in a range of 2,823-2,891 ringgit per tonne, according to Reuters market analyst for commodities and energy technicals Wang Tao.
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