KUALA LUMPUR, Oct 19: Malaysian palm oil futures closed lower on Friday amid disappointment over the 2002 federal budget which contained little incentive for the industry.

Traders said players also booked profit from gains in the last two days ahead of the weekend.

The benchmark third-month January contract ended down 30 ringgit at 920 ringgit ($242.11) a ton, the day’s low.

Volume stood at 2,231 lots against 2,286 on Thursday.

The market obviously was disappointed that the talk about duty-free export of CPO did not materialise, said a trader.

There has been speculation this week that the 2002 budget may allow all palm oil exporters to ship crude palm oil (CPO) duty-free, a privilege currently enjoyed by only a few exporters.

The budget, unveiled on Friday, only proposed that palm oil smallholders be given 12 ringgit per ton if prices go below 900 ringgit a ton.

Malaysia also said on Friday the country’s palm oil output was expected to fall by 2.1 per cent to 11.55 million tons in 2002 from an estimated 11.80 million tons this year.

Average palm oil price is forecast to rise to 1,100 ringgit ($289) a tonne next year against 919 ringgit in 2001 and 993 ringgit in 2000. The market is awaiting export figures for the first 20 days of October, due next Monday from cargo surveyors ITS and SGS.

In the physical sector, offers for October crude palm oil for the southern and central regions stood at 850 ringgit a ton against bids of 840 ringgit. Deals were done at 850 to 840 ringgit for south and at 850 for central.—Reuters