29 November 2001 (Business Times) - MALAYSIA’S crude palm oil (CPO)futures prices broke a key support level and fell across the boardyesterday due to the absence of fresh leads but traders insist it is atemporary situation caused by technical selling.This is despite most industry observers’ forecast early this month thatCPO prices are expected to perform well and float above the RM1,200 atonne level by year-end.By midday in yesterday’s trade on the Malaysian Derivatives Exchange(MDEX), the benchmark third-month February futures was down RM33 atRM1,109 a tonne after breaking the key support of RM1,120 a tonne.“CPO prices have been on an uptrend for the past two weeks and it has tocome down at some point on technical selling with a new key support ofRM1,100 a tonne,” a trader told Business Times in Kuala Lumpur yesterday.He said the market is also bogged down as some players remained anxiousover a possible increase in India’s refined bleached and deodorised palmolein base price.Rumours circulated in the market that the world’s largest edible oilimporter India plans to raise the base price to US$340 (US$1 = RM3.80) atonne from US$307 a tonne.“There is a possibility India will revise upwards the base price which mayeventually lead to a rise in import duties on Malaysia’s palm oil,” saidthe trader.India had increased import duty on Malaysia’s CPO three times last yearbefore the subcontinent finally reduced the duty to 65 per cent from 75per cent last month.India bought 2.38 million tonnes in 1999 and 2.03 million tonnes lastyear.Meanwhile, another trader said the market is expected to improve as longas the rainy season continues and export figures for November touch theone million tonne mark.According to the Malaysian Palm Oil Board, Malaysia exported 898,918tonnes of palm oil in October and many players expect November exports totop one million.Malaysia is the world’s biggest producer of CPO, exporting 8.32 milliontonnes in 1996 worth RM9.4 billion and 10.38 million tonnes with a salesvalue of RM12.47 billion last year.Meanwhile, December price dropped RM36 to settle at RM1,059 per tonnewhile January fell RM44 to settle at RM1,078 per tonne on MDEX yesterday.February contracts decreased RM46 to settle at RM1,096 per tonne and Marchfell RM44 to end at RM1,100 per tonne. Total turnover widened to 3,424lots from 2,318 lots on Tuesday, while open interest was down at 12,948contracts from 12,952 contracts previously.In the physical market, November South was traded at RM1,080 per tonnecompared with RM1,100 per tonne on Tuesday.