Traders, however, expected a rally between next Monday and Wednesday as a top-level industry conference kicks off. Malaysia's palm oil futures had ended at the highest level in four weeks on Thursday on the back of technical covering and amid rumours of intensive government intervention to support prices.

The Commodity and Monetary Exchange of Malaysia (Commex), which trades palm oil futures, is organising a price outlook conference in Kuala Lumpur from March 7 to 9 and traders expected support to emerge then.

"Whether it is with the government's support or not, we see the market picking up again and running then," said a trader.

The Primary Industries Ministry, which regulates all commodity businesses in Malaysia, denied market talk on Friday that it had set a minimum price support level of 725 ringgit a tonne ($190.78) for crude palm oil.

The denial came after speculation that federal crop agency Felda was intervening to prop up prices, which fell only slightly this week despite a huge rise in import taxes by India, the biggest buyer of palm oil.

The Primary Industries Ministry also said it could not confirm market talk that the government would ask major crude palm oil producers to set aside five percent of their annual output to run power plants.

The ministry said recently that palm oil could be used to power energy plants.

(Reuters)