KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trade higher next week, buoyed by expectations of lower production in the coming weeks.
A dealer said traders are anticipating weaker production due to the monsoon season which could contribute to the reduction of stockpiles in the country.
"Furthermore, they would also be waiting for the Malaysia Palm Oil Board’s (MPOB) report to be released on Monday,” she told Bernama.
Recently, media citing a survey reported that Malaysia’s palm oil stockpile in December 2020 slumped to 1.18 million tonnes from November 2020, down 24 per cent, a likely 13-year low.
Meanwhile, Malaysian Palm Oil Association (MPOA) data also showed that CPO production in December 2020 eased 12.23 per cent to 1.3 million tonnes from November 2020.
For the week just ended, the CPO price was mostly higher, backed by firmer soybean oil prices as well as lower palm oil output and stockpiles.
On a weekly basis, CPO futures contract for January 2021 increased RM106 to RM3,997 per tonne, February 2021 rose RM210 to RM3,974 per tonne, March 2021 surged RM230 to RM3,830 per tonne, and April 2021 strengthened RM235 to RM3,709 per tonne.
Weekly volume jumped to 370,671 lots from 138,285 lots in the previous week, while open interest surged to 206,172 contracts from 196,440 contracts a week earlier.
The physical CPO price for January South gained RM160 to RM4,030 per tonne. - Bernama
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