CPO futures to trend lower on profit taking next week

KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to retreat from this week’s gains, driven by profit taking due to higher prices, a dealer said.

Interband Group of Companies senior palm oil trader Jim Teh said prices would likely hover between RM3,350 and RM3,450 per tonne in the coming week.

"The market is also likely to be affected by the stronger ringgit against the US dollar, as foreign traders buy our CPO with the greenback. Traders also would likely be concerned with the lower export data recently,” he told Bernama.

In a research note on Friday, CGS-CIMB said palm oil futures plummeted the most in eight months on growing worries that shipments from Malaysia would slump due to weaker purchases by major buyers India and China.

"The world’s most-consumed vegetable oil closed 4.5 per cent lower at RM3,527 a tonne, the biggest decline since May. In Singapore, futures declined 4.4 per cent,” it said.

According to a broker, after strong exports in November and December because of zero export duties,

Malaysian shipments are expected to be poor in January.

He said that the market was speculating that shipments during the January 1-15 period may drop about 40 per cent from a month earlier.

"Palm oil has taken a tumble from the highest level in more than a decade to a three-week low as investors fret over a steep decline in exports from the world’s second-largest producer,” he said.

For the week just ended, the CPO price was mostly lower, dampened by weaker export data.

On a weekly basis, CPO futures contract for January 2021 decreased RM182 to RM3,815 per tonne, February 2021 slipped RM331 to RM3,616 per tonne, March 2021 declined RM407 to RM3,423 per tonne, and April 2021 weakened RM387 to RM3,322 per tonne.

Weekly volume fell to 356,133 lots from 370,671 lots in the previous week, while open interest surged to 260,960 contracts from 206,172 contracts a week earlier.

The physical CPO price for January South gained RM160 to RM4,030 per tonne. - Bernama

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CPO , Weekly , Production , Palm oil exports , Jim Teh


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