13/10/2012 (Reuters) - Malaysian palm oil futures ended lower on Friday after the government announced tax cuts that will only take effect from Jan. 1, as traders had expected a more immediate policy.

Malaysia will cut crude palm oil (CPO) export taxes and discontinue a tax free shipment quota for the grade from Jan 1 2013, a government minister said on Friday, as the world's No.2 producer seeks to snatch back market share from top producer Indonesia.

Malaysia is also looking at setting export taxes for the crude grade on a monthly basis to better reflect movements in international prices, a government source told Reuters on Friday.

A larger tax cut could boost Malaysia's crude exports and claw back market share from top producer Indonesia, as well as help ease stockpiles which climbed to a record high of 2.48 million tonnes in September, but traders did not immediately see the news as a positive development.

"Buy on rumours, sell on facts," said a dealer with a foreign commodities brokerage in Malaysia. "There was too much hype and expectations before the announcement, so now people are selling."  

The benchmark December contract on the Bursa Malaysia Derivatives Exchange lost 0.9 percent to close at  2,500 ringgit ($818) per tonne, after losing as much as 5.7 percent to 2,379 ringgit. For the week, prices posted a modest 3.5 percent gain, snapping three straight weeks of losses.

Total traded volumes surged above 44,590 lots of 25 tonnes each, compared to the usual 25,000 lots, as traders rushed to liquidate their positions.

Technicals showed that palm oil faces a resistance at 2,528 ringgit per tonne and may retrace to 2,399 ringgit, and a break above 2,528 ringgit will lead to a moderate gain to 2,579 ringgit, said Reuters analyst Wang Tao.

Some traders said the new plan could benefit millers and planters in Malaysia but may not help refiners much. The new plan could also trigger a price war between top producers Malaysia and Indonesia, said a trader with a local commodities brokerage in Malaysia.

Oil fell below $115 a barrel on Friday, as a prediction of a further decline in oil consumption and higher supplies offset concerns about potential output disruptions in the Middle East.

In other vegetable oil markets, U.S. soyoil for December delivery edged down 0.7 percent in late Asian trade. The most active January 2013 soyoil contract on the Dalian Commodity Exchange closed 1.3 percent lower on weak demand for edible oils in China, the world's No.2 buyer.  

  Palm, soy and crude oil prices at 1008 GMT

  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      OCT2    2400   +20.00    2300    2400     100
  MY PALM OIL      NOV2    2480   +27.00    2340    2480     561
  MY PALM OIL      DEC2    2500   -23.00    2379    2529   21416
  CHINA PALM OLEIN JAN3    6896   -96.00    6884    7082  473582
  CHINA SOYOIL     JAN3    9092  -120.00    9068    9256  572178
  CBOT SOY OIL     DEC2   50.95    -0.38   50.50   51.64   13551
  NYMEX CRUDE      NOV2   91.89    -0.18   91.65   92.60   20500

  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 = 3.0565 ringgit)