KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trade range-bound at between RM1,900 and RM1,920 a tonne next week, amid uncertainty in the global economy.
Interband Group of Companies senior trader Jim Teh said the market was expected to be challenging in the coming weeks with the fall in various commodity prices, including metals, indicating weaker demand and slower global growth.
He said CPO production was expected to rise in the coming months, which would put pressure on stock levels in the country and keep the price on a downtrend.
"However, the current price level is still considered attractive for the physical buyers to come in.
"Now is also a suitable time for traders to show off their marketing skills in disposing of the high stocks. They should not depend only on government assistance to help them boost the price,” he told Bernama.
On another note, Teh said the traders were awaiting the Malaysian Palm Oil Board’s data on Malaysia's total palm oil stocks for June to be released next week for a clearer market direction.
He added positive news that India, in its budget announcement on Friday, kept import tariffs on edible oils unchanged was hoped to increase the demand and provide some support to CPO prices, as the country is the world's biggest importer of palm oil.
During the week just-ended, the CPO futures traded mixed, tracking movements of closely competing edible oils as well as the ringgit versus the US dollar.
On a Friday-to-Friday basis, July 2019 rose RM44 to RM1,909 a tonne, August 2019 went up RM18 to RM1,938 a tonne, September 2019 increased RM9 to RM1,960 a tonne and October 2019 added RM6 to RM1,989 a tonne.
Weekly turnover rose to 212,264 lots from 202,943 lots last week, while open interest advanced to 272,432 contracts from 256,864 contracts previously.
On the physical market, July South stood at RM1,910 a tonne. – Bernama