KUALA LUMPUR, Jan 31: Malaysian crude palm oil futures ended mostly higher on Thursday as investors looked to square up positions ahead of the long holiday weekend, traders said.

But market sentiment was battered by a sharp drop in exports as reported by cargo surveyors and weakness in US crude oil markets.

Prices of the vegetable oil, roughly 5.5 per cent off an historic high of 3,420 ringgit, have been pressured by jittery global markets amid a looming US recession and a massive build-up in palm oil reserves.

The benchmark April contract on the Bursa Malaysia Derivatives Exchange settled up 8 ringgit at 3,232 ringgit ($999) per ton, after falling as low as 3,198 ringgit in early trade.

Traders are getting into the palm oil market before the holidays as they will be exposed to the crude and soyaoil moves for at least two days, said a trader with a local brokerage.

Other months ranged between a 20 ringgit drop to an increase of 37 ringgit but March 2008 contract remained unchanged. Overall trade stood at 7,947 lots of 25 tons, down from 10,000 lots that change hand on a routine day.

Exports of Malaysian palm products in January fell by athird to 998,344 tons from 1,428,772 tons shipped in December, cargo surveyor Intertek Testing Services said on Thursday.

Another surveyor, Societe Generale de Surveillance reported declines of 28.2 per cent to 1,036,926 tons for January.

With such weak exports, the question is whether palm oil is losing its market share in the food sector because of the high prices, said a head trader with a foreign brokerage.

Malaysia’s January palm oil stocks are likely to rise 8.2 per cent to 1.82 million tons, the highest in at least 25 years as exports fall sharply on record high prices, a Reuters poll showed on Wednesday.

In Malaysia’s physical market, crude palm oil for January and February shipments in the southern region was quoted at 3,235/3,260 ringgit a ton. Trades were unquoted by the end of the session.—Reuters