KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is likely to undergo technical correction next week with pessimistic exports outlook.
Interband Group of Companies senior palm oil trader Jim Teh said prices would likely hover between RM3,200 and RM3,300 per tonne in the coming week.
"The demand will also be slower, given the upcoming Chinese New Year holiday next month,” he told Bernama.
According to cargo surveyor Societe Generale de Surveillance, Malaysian palm oil products exports for the Jan 1-20 period dropped 43.3 per cent to 572,910 tonnes from 1,010,653 tonnes shipped for Dec 1-20.
Meanwhile, data from another cargo surveyor, Intertek Testing Services also showed that exports of the country’s palm oil products for Jan 1-20 fell 43.1 per cent to 607,900 tonnes from 1,067,670 tonnes for Dec 1-20.
Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa said export for Jan 1-25 would likely be lower while upcoming production data for from Malaysian Palm Oil Association and announcement from Indonesia on the February export tax would support the CPO price to stay at above current levels.
On Thursday, the Ministry of Plantation Industries and Commodities forecast CPO production would increase by about three per cent to 19.7 million tonnes this year from 19.14 million tonnes in 2020.
Minister Datuk Dr Mohd Khairuddin Aman Razali said this was based on the expected expansion of mature oil palm plantation areas, as well as the dry weather which had affected the production of fresh fruit bunches and subsequently CPO.
For the week just ended, the CPO price was mostly lower, dampened by weaker export data.
On a weekly basis, CPO futures contract for February 2021 narrowed RM33 to RM3,583 per tonne, March 2021 slipped RM3 to RM3,420 per tonne, April 2021 decreased RM40 to RM3,282 per tonne, and May 2021 weakened RM47 to RM3,198 per tonne.
Weekly volume rose to 391,143 lots from 356,133 lots in the previous week, while open interest shrank to 245,194 contracts from 260,960 contracts a week earlier.
The physical CPO price for January South sank RM197 to RM3,630 per tonne. - Bernama
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