17/04/2012 (Business Recorder) - Malaysian palm oil futures inched down on Monday as a drop in export numbers for the first half of the month led some traders to book profits, although losses were curbed by tightening edible oil supply.

Palm oil hit a 13-month high at 3,628 ringgit per tonne last week after Malaysian stocks fell below the 2-million-tonne mark for the first time this year, fanning fears of tighter global supplies, given the drought hitting the South American soy crop.

But the futures market ended that week with a loss of 2.6 percent, as some traders said the market was overbought.

Malaysian palm oil exports fell by a steep 14.8 percent for the first half of April from a month earlier, cargo surveyor Intertek Testing Services said, although analysts said that might not necessarily be a sign of weaker demand.

"You can't just look at what happens in 15 days and say that demand is weak.

There may be other reasons, such as timing in shipping.

We need to get the overall (export data) for the month (to gauge demand)," said James Ratnam, an analyst at TA Securities in Malaysia.

"It seems more like technical selling.

Exports for the first 15 days down 15 percent, it could be a good excuse to sell.

It doesn't really translate into weak demand.

Demand might not be as strong as last month but 15 percent is a bit too steep."

At closing, benchmark July palm oil futures on the Bursa Malaysia Derivatives Exchange inched down 0.3 percent at 3,487 ringgit ($1,138) per tonne.

Traded volumes stood at 28,067 lots of 25 tonnes each, slightly higher than the usual 25,000 lots.

On the technicals front, Reuters market analyst Wang Tao maintained a bearish view, saying palm oil would slide further to 3,401 ringgit per tonne.

On the supply side, Malaysia's palm oil stocks for March fell to a seven-month low at 1.96 million tonnes, beating market estimates and prompting some traders to lock in more crude palm oil purchases.

Another cargo surveyor Societe Generale de Surveillance reported a 13.5 percent drop in exports for April 1-15, echoing earlier data issued by ITS.

Exports for refined products suffered declines as the Indonesia tax advantage drew orders away from No.2 producer Malaysia.

In other vegetable oil markets, the most active US soyoil contract for May lost 0.7 percent while the most active Dalian soyoil September contract closed 1.4 percent lower.