12/05/2012 (Reuters) - Malaysian palm oil futures slipped to a 9-week low on Friday before ending more than 2 percent lower as political uncertainty in the euro zone and weak industrial production data in China weighed on the demand outlook for the edible oil.     

China's industrial production in April grew at its slowest pace in nearly three years, which along with poor trade numbers on Thursday, suggest the world's No. 2 economy continues to slow down after a weak first-quarter performance.  

A gloomy global economic outlook, together with slowing exports in Malaysia indicated by cargo surveyor data, sent palm oil futures down 2.5 percent this week.  

"First, refining margins are negative and demand is anaemic," said a trader with a local commodities brokerage in Malaysia. 

"The macro uncertainty over in Europe also weighed on the market plus technical indicators are bearish after having failed repeatedly to break key resistance levels." 

Benchmark July palm oil futures on the Bursa Malaysia Derivatives Exchange fell 2.2 percent to close at 3,275 ringgit ($1,067) per tonne. Prices earlier touched a low of 3,265 ringgit, the weakest since March 8. Traded volumes stood at 30,413 lots of 25 tonnes each, higher than the usual 25,000 lots. 

Exports for the first 10 days of May fell 6 percent and 14.2 percent from a month ago, according to cargo surveyors Intertek Testing Services and Societe Generale de Surveillance respectively.

Lower demand from major food buyers China and India contributed to the fall in shipments, while the slowing global economic growth is also a concern. 

But a low global stocks of oilseeds, suggesting a tightening supply of the raw materials for competing edible oils, remains a bullish factor for palm oil.  

The U.S. Department of Agriculture forecast record exports next season for soybeans, shrinking U.S. stocks to the lowest in four years.  

On the local front, the Malaysian Palm Oil Board, also reported April stock levels at a one-year low.  

Malaysia's April palm oil stock level fell 5.4 percent to 1.85 million tonnes from a month ago, which some analysts said was at the lower range of the consensus' expectation.  

"It was 3 percent below our estimate of 1.9 million tonnes as the tree stress effect had caused a deeper production drop than expected,"  Alan Lim, an analyst with Malaysia's Kenanga Investment Bank, said in a research report.

"On the overall, the sustained drop in the stocks level below 2 million tonnes is positive for CPO prices," he said, referring to crude palm oil.

Oil fell to under $112 a barrel on Friday following a weak reading of industrial growth in China.

In other vegetable oil markets, the most active U.S. soyoil contract for July and the most active Dalian soyoil September contract traded 1.5 percent lower.        

  Palm, soy and crude oil prices at 1012 GMT

  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      MAY2    3290   -65.00    3290    3295      15
  MY PALM OIL      JUN2    3283   -77.00    3272    3334    2022
  MY PALM OIL      JUL2    3275   -74.00    3265    3330   18831
  CHINA PALM OLEIN SEP2    8438  -170.00    8432    8648  262726
  CHINA SOYOIL     SEP2    9566  -146.00    9558    9760  546946
  CBOT SOY OIL     JUL2   52.68    -0.82   52.50   53.58   13792
  NYMEX CRUDE      JUN2   96.15    -0.94   95.74   96.61   25196

  Palm oil prices in Malaysian ringgit per tonne
  CBOT soy oil in U.S. cents per pound
  Dalian soy oil and RBD palm olein in Chinese yuan per tonne
  Crude in U.S. dollars per barrel
  ($1 = 3.07 ringgit)