KUALA LUMPUR, Dec 21: Malaysian palm oil futures fell for a second straight day on Friday after weighing in an overnight drop in Chicago soyaoil futures and bearish export data released on Thursday.

Concern that China had yet to announce import quotas for palm oil after its entry into the World Trade Organization also put a cap on whatever buying potential that remained in the market after most players had gone on holiday, dealers said.

Malaysian Primary Industries Minister Lim Keng Yaik said just before the market’s close that he expected China, the world’s second largest palm oil buyer, to announce import quotas for 2002 by early January.

Under the WTO, China has committed to import at least 2.4 million tonnes of palm oil next year.

But Lim said Beijing could take more with encouragement from Malaysia and Indonesia, the two largest producers.

The benchmark third-month March futures closed 26 ringgit lower at 1,134 ringgit ($298) a tonne, after opening the day on a weak note following an overnight drop in Chicago soyaoil.

On Thursday, the March contract ended 28 ringgit down after cargo surveyor Societe Generale de Surveillance (SGS) put palm oil exports for December 1-20 at 578,143 tons, against 721,512 for November 1-20.

Although some dealers said a drop in shipments for December was normal due to the many holidays in the month, others said the fall of around 143,000 tons was more than expected.

December crude palm oil (CPO) for the southern and central regions was offered at 1,105 ringgit a ton, ten lower from Thursday. The contract attracted bids at 1,095 and was reportedly traded at 1,100.

January CPO for south and central was offered at 1,115 ringgit against bids at 1,105. Business was reported at 1,100.

Malaysia said on Friday it will extend a scheme to control production by cutting down oil palm by six months to June to try to attract more growers to the project.

Primary Industries Minister Lim Keng Yaik said the government was extending the scheme because a rally in palm oil futures prices had deterred growers from taking up a compensation offer to cut back their crop.

But palm oil prices have risen nearly 400 ringgit a ton, or more than 50 per cent, since the plan was launched early this year, negating whatever incentive the scheme offered.—Reuters