SINGAPORE (Sept 5): Malaysian palm oil eased on Friday from a one-week high hit earlier in the day, but posted its first weekly gain in five as the government's move to exempt the commodity from export taxes buoyed expectations of a recovery in exports.

Palm oil futures added more than 5 percent this week, the most since November, with a strong rally on Thursday after Malaysia exempted crude palm oil (CPO) from export taxes in September and October.

"Malaysian planters are hoping to boost exports after tax exemption and take some of the market share from Indonesia," said a Kuala Lumpur-based trader. "Refiners are also actively buying CPO because they fear that they might not get supplies if producers start exporting CPO directly."

The benchmark November contract on the Bursa Malaysia Derivatives Exchange finished down 2 ringgit at 2,028 ringgit ($637) per tonne, after hitting 2,041 ringgit, its highest since Aug. 27, earlier in the session.  

Traded volume stood at 62,494 lots of 25 tonnes each, almost double the daily average of 35,000 lots.

The exemption from export duties, which had been set at 4.5 percent for September, is expected to increase palm oil exports by 600,000 tonnes over the two months and reduce stock levels to 1.6 million tonnes by the end of the year, the nation's commodities ministry said in a statement.

Shipments of Malaysian palm oil products fell 4.8 percent from a month earlier to 1,288,117 tonnes in August, cargo surveyor Intertek Testing Services said on Tuesday, but recovered from steeper losses earlier in the month as a surge in demand from India offset weaker imports by China and Europe.

Malaysian palm oil stocks at the end of August likely jumped to their loftiest in seven months as higher output due to crop-friendly weather outstripped poor export demand, a Reuters survey showed on Thursday.

On the technical front, palm oil may retrace to 1,968 ringgit per tonne as it failed to break resistance at 2,046 ringgit, according to Reuters market analyst Wang Tao.

Resistance is at the 300 percent Fibonacci projection level of a downward wave 3 which started at the July 7 high of 2,424 ringgit. It could have triggered a correction towards the 361.8 percent projection level at 1,968 ringgit.

The U.S. soyoil contract for December edged up in late Asian trade, while the most active soybean oil contract on the Dalian Commodities Exchange added 0.2 percent.

In other markets, Brent crude oil steadied near $102 a barrel on Friday, heading for a third weekly drop in four as a strong dollar depressed demand, though data showing lower crude stocks in the United States kept a floor under prices.
($1 = 3.183)

Palm, soy and crude oil prices at 1007 GMT
Contract        Month    Last   Change     Low    High  Volume
MY PALM OIL      SEP4    2040    +5.00    2036    2050      17
MY PALM OIL      OCT4    2037    +4.00    2007    2049    4941
MY PALM OIL      NOV4    2028    -2.00    1995    2041   23223
CHINA PALM OLEIN JAN5    5230   +30.00    5204    5268  459236
CHINA SOYOIL     JAN5    6030   +10.00    6006    6060  408570
CBOT SOY OIL     DEC4   32.21    +0.00   32.09   32.38    3909
NYMEX CRUDE      OCT4   94.94    +0.49   94.32   94.99   13215