KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to witness sluggish trading next week as weaker demand continues to depress prices.
Palm oil trader David Ng said the world’s biggest buyer of palm oil, India, is currently having a lockdown to curb COVID-19 pandemic until April 14, and it will affect the local market.
"We are expecting prices to range between RM2,200 and RM2,300 per tonne,” he told Bernama.
India’s Prime Minister Narendra Modi today will discuss with chief ministers of all states via video conference to decide whether the nationwide lockdown, which began on March 24, should be extended beyond April 14.
Ng said Sabah government decision yesterday to allow oil palm plantations and mills in six districts -- Tawau, Lahad Datu, Kinabatangan, Semporna, Kunak and Kalabakan -- to operate during the Movement Control Order (MCO) period does not have much impact on buying interest.
"However, production will continue to be high since production will resume,” he added.
Yesterday, Prime Minister Tan Sri Muhyiddin Yassin announced the extension of the MCO by another two weeks, from April 15 to 28.
For the week just ended, the market was traded mostly higher in line with the positive sentiment in Asian equity markets, weaker ringgit and supply concern which sparked the buying interest in the golden crop.
On a Friday-to-Friday basis, the CPO futures contract for April 2020 and May 2020 rose RM69 each to RM2,389 per tonne and RM2,365 per tonne, June 2020 was RM67 higher at RM2,312 per tonne, and July 2020 improved RM66 to RM2,285 per tonne.
Weekly turnover fell to 257,369 lots from last Friday's 310,509 lots, while open interest contracted to 243,081 contracts from 264,378 contracts.
On the physical market, the CPO price for April South stood at RM2,380 per tonne. - Bernama
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