* Exports growing but not as fast as stocks
* High stocks point to palm widening discount to soyoil
Malaysian palm oil futures dropped on Thursday as traders cut back on worries that stocks could grow beyond two million tonnes this month. Although orders for the tropical oil have grown in response to higher output in Malaysia and a widening discount to competing soyoil, stocks are expected to rise above a 16-month high of 1.92 million tonnes hit in May.
If in the next few months Malaysian stocks rise above the record 2.3 million tonnes last seen in November 2008, palm oil prices could extend its 14 percent loss notched so far this year.
"I think 3,000 ringgit needs to come, sooner or later. We are on track for declines and that is helped by weaker crude oil and soyoil as well," said a trader with a foreign commodities brokerage.
The new benchmark September CPO contract on the Bursa Malaysia Derivatives ended 2.4% lower at MYR3,193 a metric ton, its lowest level since May 6.
"If [palm oil] stocks continue to rise, I think crude palm oil prices are likely to fall to $950/ton by the end of the year," said a commodities broker in Mumbai.
Cargo surveyor Societe Generale de Surveillance said June 1-15 Malaysian palm oil exports jumped 16.2 percent to 699,674 tonnes from a month ago.
Demand was driven mostly by China as well as the Indian subcontinent, which has a sizable Muslim population, and needs to restock ahead of Ramadan where elaborate dinners follow fasting during the day.
Part of this has to do with main cooking oil ingredient -- refined, bleached and deodorised palm olein -- widening its discount to competing soyoil to $90 per tonne, up from $80 last week.
U.S. soyoil for July delivery dropped 0.4 percent on weaker crude and improved crop weather for soybeans.
The most active January 2012 soybean oil contract on the Dalian Commodity Exchange fell 0.5 percent.
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