JAKARTA (Dow Jones)--Crude palm oil futures on Malaysia's derivatives
exchange fell Thursday on bearish forecasts presented at a palm oil conference
in Kuala Lumpur, said trade participants.

  The benchmark May contract on the Bursa Malaysia Derivatives ended MYR60
lower at MYR1,920 a metric ton, near the intraday low of MYR1,909/ton.

  London-based analyst Dorab Mistry said CPO prices are likely to fall to
MYR1,500/ton in the second half of this year, tracking weak soybean oil prices,
which he said may fall to $500/ton from April should the upcoming U.S. soybean
plantings turn out to be higher on year.

  Beyond April and May, palm oil will become uncompetitive against South
American soy oil and will lose market share, said Mistry.

  At the same time, palm oil will be hit by a declining market suffering from
an oversupply of vegetable oils relative to demand. Mistry said global
vegetable oil supply this year will exceed demand by 2.2 million tons owing to
the current global economic recession.

  Richard Kastilani, director of Indonesia-based Tropical Oils Products Ltd.,
said CPO prices are likely to stay in a MYR1,550-MYR2,000/ton range in the next
3-4 months.

  "If we have a good oilseeds harvest, particularly of rapeseed and sunflower,
and crude oil moves between $35 and $45 (a barrel), CPO prices are likely to be
below $400/ton (MYR1,475/ton) during the second half of 2009," he said.

  Market participants had expected more positive price forecasts of around
MYR2,000-MYR2,200/ton from the conference, so the bearish forecasts presented
at the conference dragged prices down, said a Kuala Lumpur-based trader.

  Malaysia's Minister for Plantation Industries and Commodities Peter Chin said
the country's export earnings from palm oil would fall sharply this year versus
last year's record of MYR65 billion due to lower CPO prices.

  Chin said a comfortable level for CPO prices which would make plantation
companies "happy" would be around MYR2,000/ton.

  The open interest in CPO on the BMD fell to 86,992 lots from 88,765 lots
Wednesday. The traded volume fell to 12,542 lots from 12,770 lots. One lot
comprises 25 tons.

  Cash CPO for prompt shipment was last offered MYR60 lower at MYR2,010/ton.

  Malaysia's cash palm olein for July/August/September was offered $5 lower at
$610/ton.

Closing BMD CPO futures prices in MYR/ton at 1000 GMT:

Month      Close    Previous   Change   High    Low
Mar 09     2,000    2,060      Dn  60   2,045   2,000
Apr 09     1,968    2,005      Dn  37   2,019   1,962
May 09     1,920    1,980      Dn  60   1,973   1,909
Jun 09     1,880    1,950      Dn  70   1,936   1,871