VEGOILS-Palm oil edges up on demand view, ends week flat

* Palm oil futures up on demand from India ahead of festive
season
* Futures almost flat compared to a week ago
* Prices capped by high inventories - analyst

(Updates prices, adds details)
By Anuradha Raghu
KUALA LUMPUR, Oct 19 (Reuters) - Malaysian palm oil futures
rose on Friday, with market players confident of a recovery in
demand thanks to strong Malaysian exports in the first half of
the month and a major festival next month.
"There are more purchases from India and China - India
especially - because Deepavali is coming soon. They need to
stock up more on palm oil," said Malaysia's Public Investment
Bank analyst Chong Hoe Leong, referring to the Hindu festival of
lights set for Nov. 13.
"The current crude palm oil price is quite attractive for
purchase because it's at the low base," he said, but warned that
inventory levels are expected to stay consistently high for the
remainder of the year.
At the close, the benchmark January contract on the
Bursa Malaysia Derivatives Exchange rose 0.2 percent to 2,501
ringgit ($820) per tonne. Prices have lost more than 21 percent
so far since the start of the year.
Total traded volumes stood at 27,875 lots of 25 tonnes each,
just slightly higher than the usual 25,000 lots.
For the week, the edible oil was almost flat, as concerns
over record stocks offset expectations of stronger demand.
Market players will be watching out for exports numbers for
Oct. 1-20 to further gauge demand trend, after both cargo
surveyors reported an increase in exports for the first half of
the month.
Despite hopes for an improved exports trend, analysts say
inventories, which hit a record high in September, remain
worrying as palm oil production shows no signs of slowing, and
Malaysia struggles to push out shipments quicker amid weaker
global economic growth.
"For next year, it is a bit challenging for palm oil because
we can see a slowdown in market activity especially in the major
consuming countries," Chong said.
"That will be the major concern for the palm oil market,
despite Malaysia recently imposing a lower tax structure
starting from next year," he added, referring to the tax cut
from the current level of 23 percent per tonne.
In a bullish sign for palm oil, Brent crude futures held
steady at above $112 a barrel on Friday, but analysts and
traders said a move to the downside was likely because the UK's
Buzzard oilfield was expected to restart this weekend while the
demand outlook remained weak.
In other vegetable oil markets, U.S. soyoil for December
delivery fell 0.2 percent in late Asian trade. The
most-active May 2013 soybean oil contract on the Dalian
Commodity Exchange were almost flat.

Palm, soy and crude oil prices at 1009 GMT

Contract Month Last Change Low High Volume
MY PALM OIL NOV2 2404 +8.00 2374 2420 331
MY PALM OIL DEC2 2475 +19.00 2452 2489 5079
MY PALM OIL JAN3 2501 +5.00 2492 2524 16347
CHINA PALM OLEIN JAN3 6962 +12.00 6960 7012 156920
CHINA SOYOIL MAY3 9260 +2.00 9250 9320 409802
CBOT SOY OIL DEC2 52.22 -0.07 51.73 52.30 10432
NYMEX CRUDE NOV2 92.07 -0.03 91.82 92.32 9631

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
Crude in U.S. dollars per barrel

($1 = 3.05 ringgit)

(Additional reporting by Chew Yee Kiat; Editing by Eric Meijer
and Anand Basu)