13/01/2009 (Business Times) - PALM oil futures in Kuala Lumpur, the global benchmark, dropped the most in more than two months amid concern sales from Malaysia may slow after reaching a record in December.

March delivery palm oil dropped as much as 9.3 per cent to RM1,803 (US$504) a metric ton on the Malaysia Derivatives Exchange, the biggest decline since October 24.

While December exports rose 18 per cent to 1.61 million tons, according to the Malaysian Palm Oil Board yesterday, data from independent surveyor Societe Generale de Surveillance a few hours later showed Malaysia’s palm oil exports fell 37 per cent in the first 10 days of January to 384,842 metric tons compared with the same period the previous month.

“We expect weaker exports this month,” according to HwangDBS Vickers Research Sdn.

A poor export outlook is stalling a rally that pushed up palm oil prices 25 per cent in three weeks to a three-month high.

“December numbers will not be repeated,” said Alvin Tai, an analyst at OSK Research Sdn., said. Palm oil will average RM1,650 this year, from RM2,852 in 2008, he said.