JAKARTA, Dec 4: Malaysian palm oil futures closed down nearly 5 per cent on Thursday following bearish forecasts from top industry analysts and signs of slowing demand.

The benchmark February palm oil contract on the Bursa Malaysia’s Derivatives Exchange settled down 74 ringgit or 4.82 per cent at 1,462 ringgit ($402) a ton, coming off from a low of 1,457 a ton.

Many players looked at that as an opportunity to sell the market down and start fresh next week, the dealer said.

Other traded contracts fell between 65 ringgit and 94 ringgit. Overall volume was 9,133 lots of 25 tons each.

Malaysia palm oil futures could fall another 13-15 per cent, to under 1,300 ringgit per tonne by April if the price of Brent crude goes below $35 a barrel, top industry analyst James Fry said at a conference in Indonesia’s resort island of Bali on Thursday.

Palm oil prices have fallen at a similar pace to benchmark crude oil , dropping more than two-thirds from a March peak of 4,486 ringgit due to bumper crops in top producers Malaysia and Indonesia, as well as demand-slowing recession.

There was some demand for Chinese New Year but those requirements should have been met by the end of December or early January, the second trader said.

The room for price increases is diminishing.

Palm oil tends to track crude oil moves as rival vegetable oils such as rapeseed and soyaoil are increasingly used as a feedstock for biodiesel.In Indonesia, the world’s largest palm producer, palm oil prices fell nearly 7 per cent, in line with the weak Malaysian market.

The state marketing centre in Jakarta sold crude palm oil at 5,405 rupiah a kg, a 6.9 per cent fall from 5,806 rupiah on Wednesday.

Producers in Medan -- home to Belawan port, Indonesia’s key port for palm oil exports-- sold crude palm oil at 5,450 rupiah a kg, falling 6 per cent from 5,801 rupiah on Tuesday.

Producers in Medan did not hold any auctions on Wednesday.

Refiners in Jakarta sold refined, bleached, deodorised (RBD) palm oil used as cooking oil at 6,200 rupiah a kg, down from 6,300 rupiah a kg on Tuesday.—Reuters