KUALA LUMPUR, Dec 27: Malaysian palm oil futures closed slightly lower on Wednesday, as players took profits after a rally that drove prices to their highest in nearly eight years.

The benchmark third-month March contract on the Bursa Malaysia Derivatives exchange ended down 6 ringgit at 1,989 ringgit ($563) a ton.

It is normal to have profit taking after such a huge increase, said one dealer. The market is looking forward to the production figures for this month. Other traded contracts fell between 1 and 15 ringgit.

Overall volumes shot up to 20,267 lots of 25 tons each from around 10,000 to 12,000 lots traded on a routine day.

State-run Malaysian Palm Oil Board is due to release December palm oil production, exports and closing stocks data on Jan. 10.

Malaysian palm oil futures jumped 5 per cent on Tuesday and rose further at the open on Wednesday, boosted by fears that floods in the southern part of the country would further cut supplies.

The region has been hit by its heaviest rains in a century and the resultant flooding has forced about 60,000 people to flee their homes.

Dealers said torrential rains and floods could cut the nation's palm oil output in December by 20 to 30 per cent from 1.55 million tons produced last month.

Traders said there was strong buying in the physical market for prompt shipments. January palm oil in the southern region was quoted at 1,990/2,000 ringgit a ton and trades were done between 1,980 and 2,000 ringgit.

Exports of Malaysian palm oil products for Dec. 1-25 fell nearly 18 per cent to 903,550 tons from 1,100,005 tons shipped between Nov. 1 and 25, cargo surveyor Intertek Testing Services said.

Another cargo surveyor, Societe Generale de Surveillance, said exports for Dec. 1-25 fell 16.2 per cent to 914,312 tons.—Reuters