KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to remain cautious next week, tracking global futures markets as well as equities markets given the recent fragility of the global economy.
Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa told Bernama that traders would also be seeking fresh leads, particularly on the extent of the production rise and change in stocks.
"Next week CPO futures will be trading based on March 1-20 production data from the Malaysian Palm Oil Association and export outlook from March 1-25 by cargo surveyors, and both are expected to be lower, ” he said.
He said production and exports are forecast to be weaker amid the two-week Movement Control Order (MCO) to contain the COVID-19 pandemic from March 18 to 31.
"Prices are expected to stay under pressure due to disruption of workers in plantations, mills, refineries and transportation during the MCO period, ” he added.
For the week just ended, the market was traded mostly lower in line with the downtrend in global futures markets, negative sentiment in the local equity market as well as profit-taking activities.
On a Friday-to-Friday basis, the CPO futures contract for March 2020 recovered RM36 to RM2,338 per tonne, April 2020 went down RM12 to RM2,311 per tonne, May expanded RM4 to RM2,288 per tonne and June 2020 strengthened RM11 to RM2,281 per tonne.
Weekly turnover increased to 479,493 lots from last Friday's 392,393 lots, while open interest fell to 303,338 contracts from 321,588 contracts.
On the physical market, the CPO price for April South stood at RM2,380 per tonne. - Bernama
Did you find this article insightful?
75% readers found this article insightful