* India slaps 2.5 pct import duty on crude edible oils * Palm oil to retrace to 2,403 ringgit - technicals (Recasts, updates throughout) By Chew Yee Kiat SINGAPORE, Jan 17 (Reuters) - Malaysian palm oil futures fell on Thursday after India imposed an import duty on crude palm oil imports, a move that could hurt demand and leave stocks near record highs. India, the world's biggest buyer of vegetable oils, has set a 2.5 percent import duty on crude edible oils to stem imports and protect domestic oilseed growers. Traders fear demand may take a further hit from the move after Malaysian exports suffered a 20 percent decline for the Jan. 1-15 period from a month ago. "The market reacted negatively to the import duty," said James Ratnam, a research analyst with TA Securities in Malaysia. "But we are mindful that the duty may be too small to really have an impact on crude palm oil demand." The benchmark April contract on the Bursa Malaysia Derivatives Exchange lost 2.1 percent to close at 2,378 ringgit ($789) per tonne. Total traded volume surged to 45,433 lots of 25 tonnes each, compared with the usual 25,000 lots, as the news triggered a sell-off. Technical analysis showed that Malaysian palm oil may end its current rebound around resistance at 2,449 ringgit per tonne, retracing to 2,403 ringgit, said Reuters market analyst Wang Tao. Malaysia, which neighbours top producer and rival Indonesia, has been struggling with record stocks since September due to tepid global economic conditions and the euro zone crisis, which have stifled demand and caused prices to tumble 23 percent in 2012. While end-stocks are expected to slowly shrink in the first quarter of the this year on the back of seasonally slowing production, sluggish exports could crimp any recovery in prices. "For December we have stocks at 2.63 million tonnes. My assumption is that we are not going to see a 3 million tonne stock level, but it all depends on how exports play out for the rest of the month," said Ker Chung Yang, an analyst with Phillip Futures in Singapore. Brent futures steadied near $110 per barrel on Thursday after Islamist militants attacked an Algerian gas field and took Western hostages, although concerns about a weak global economic outlook and demand worries weighed. In other vegetable oil markets, U.S. soyoil for March delivery fell 0.6 percent in late Asian trade. The most active May soybean oil contract on the Dalian Commodity Exchange lost 0.2 percent at the close. Palm, soy and crude oil prices at 1006 GMT Contract Month Last Change Low High Volume MY PALM OIL FEB3 2346 -41.00 2335 2402 667 MY PALM OIL MAR3 2361 -54.00 2360 2428 9590 MY PALM OIL APR3 2378 -52.00 2377 2442 22082 CHINA PALM OLEIN MAY3 6712 -64.00 6700 6818 454242 CHINA SOYOIL SEP3 8676 +12.00 8664 8730 368604 CBOT SOY OIL MAR3 51.00 -0.31 50.92 51.66 6803 NYMEX CRUDE FEB3 94.42 +0.18 93.80 94.47 13533 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

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