JAKARTA, Nov 13: Malaysian palm oil futures closed nearly 4 per cent lower on Thursday, but were off lows on short-covering after crude oil recovered some losses, traders said.

The benchmark January contract on the Bursa Malaysia Derivatives Exchange closed 59 ringgit, or 3.83 per cent lower, to 1,480 ringgit ($411) per ton, after having dropped earlier to 1,435 ringgit.

Other traded contracts fell between 38 ringgit and 75 ringgit. The overall volume stood at 13,001 lots of 25 tons each.

I think there was some fresh buying of crude palm oil when the market approached to 1,400 ringgit. That boosts sentiment.

The crude recovery also helps turn around the palm price, said a trader at a Kuala Lumpur-based brokerage firm.

In Asian trading, US light crude for December delivery was down 28 cents at $55.88 per barrel by 1004 GMT, after having fallen earlier to $54.67 -- the lowest since Jan. 30, 2007.

The current levels of palm prices might have priced in most bearish factors such as crude oil weakness and global recession, another trader at a commodities brokerage in Kuala Lumpur said.

I believe it is unlikely for the palm price to test its recent low (of 1,331 ringgit) in near future, the second trader said.

The first trader, however, said the trend would still depend on crude oil.

Of course if crude oil sinks again, we will sink together, the trader said.

In Indonesia, the world’s biggest palm oil producer, the state marketing centre said it did not hold an auction for the local market today.

The centre, which normally sells palm oil from state plantations, said it only sold 3,500 tons of crude palm oil for exports at $385 per ton.

Producers in Medan -- home to Belawan port, Indonesia’s key port for palm oil exports -- sold palm oil at 4,732-4,759 rupiah ($0.411-$0.413) per kg, compared to 4,990-5,140 rupiah per kg on Tuesday. There was no auction on Wednesday.

Prices did not fall that much because of rupiah weakness, a trader in Medan said.

Meanwhile, refiners in Jakarta sold refined, bleached,deodorised (RBD) palm olein, which is used in cooking oil, at around 5,750 rupiah against 5,800 rupiah on Wednesday.—Reuters