26/09/2011 (Reuters) - Malaysian palm oil futures fell on Friday to their lowest in nearly a month as commodity markets across the board went into freefall on prospects of a global economic slowdown eroding commodity demand growth. 
   
Third-month palm oil is set for its worst weekly performance since June as U.S. and euro zone officials grapple with plans to support their economies, although traders are counting on strong festival demand to limit losses. 
   
Traders are also looking out for announcements from India, the world's top palm oil buyer, on raising import tariff values to insulate the domestic refining industry after Indonesia cut its export taxes on processed palm oil. 
   
The announcement could come at the Globoil India conference that starts on Friday, which features top industry analysts such as Godrej's Dorab Mistry, James Fry from LMC International and Thomas Mielke of Oil World. 
   
"The main focus is the world economy for the market and to some extent, the Globoil conference," said a trader with a local brokerage in Kuala Lumpur.
   
"Fundamentals may be mildly supportive but it is getting overshadowed by the sell-off in commodity markets," he added.  
   
By midday, benchmark December palm oil FCPOc3 on the Bursa Malaysia Derivatives Exchange fell 0.7 percent to 2,989 ringgit ($948.21). Earlier in the session, the contract dropped to 2,961 ringgit a tonne, the lowest since Aug. 26.
   
Overall volumes were light, with 9,002 lots of 25 tonnes each changing hands, compared to the usual 12,500 lots. 
   
Traders said palm oil prices has fared better than competing soyoil as the ringgit currency has fallen sharply in recent days against the U.S. dollar, making palm oil feedstock much cheaper to process. 
   
Also, palm oil has maintained a wide discount above $100 to soyoil from South America that ensures the tropical oil will capture the bulk of food demand. 
   
And last minute orders for palm oil are likely to pour in ahead of India's Diwali festival in late October and China'Golden Week holiday early next month given the sharp declines in recent days. 
   
Brent crude rose above $106 on Friday as investors took the opportunity to buy on the dip after a plunge in the previous session took prices to their lowest since early August.  
   
U.S. soyoil for October delivery fell 0.1 percent,extending losses from the previous session. The most active May 2012 soybean oil contract on China's Dalian Exchange lost 1.7 percent.
    
  Palm, soy and crude oil prices at 0522 GMT
                                                                 
  Contract        Month    Last   Change     Low    High  Volume
  M'ASIA PALM OIL  OCT1    3000   -23.00    2989    3008     124
  M'ASIA PALM OIL  NOV1    2990   -21.00    2960    2995    1224
  M'ASIA PALM OIL  DEC1    2989   -20.00    2961    2994    6234
  M'ASIA PALM OIL  JAN2    2989   -27.00    2962    2994     969
  DALIAN SOY OIL   MAY2    9764  -164.00    9744    9818  296292
  CBOT SOY OIL     DEC1   53.73    -0.21   53.72   54.10    4502
  NYMEX CRUDE      NOV1   80.46    -0.05   80.37   81.81   14560
                                                                 
  Palm oil prices in Malaysian ringgit per tonne
  CBOT soy oil in U.S. cents per pound
  Dalian soy oil in Chinese yuan per tonne
  Crude in U.S. dollars per barrel
  ($1 = 3.152 Ringgit)