KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to decline next week on profit-taking activities.
Interband Group of Companies senior palm oil trader Jim Teh said the stock has remain high in Malaysia and also in Indonesia as the demand is low from other countries.
"As there is no major festivals happening in the coming months, we expect a bearish trend in trading as well as slow demand that may result in a price downtrend,” he told Bernama.
As such, he said, the futures contract is expected to trade between RM3,100 and RM3,200 per tonne.
Data released by Intertek Testing Services also showed that exports for June 1 to 15 fell 3.8 per cent to 658,900 tonnes from 685,114 tonnes shipped in the same period in May 2021.
Cargo surveyor Amspec Malaysia said exports in the June 1 to 15 period fell 6.2 per cent to 652,770 tonnes from 695,764 tonnes in the same period last month.
Palm oil trader David Ng estimated the price to trade within the similar range as market awaits key production projections and export data next week.
Meanwhile, in a circular posted on the Malaysia Palm Oil Board's website today, Malaysia has for the seventh straight month maintained the export tax for CPO at eight per cent for July 2021 after the market price surpassed RM3,450 per tonne.
The rate would be effective from July 1 to 31, which is a continuation of the export tax rate since Jan 1, 2021.
For the week just ended, the market closed mostly lower, tracking the weakness on soybean oil in the Chicago Board of Trade and Dalian Commodity Exchange.
On a weekly basis, July 2021 contract trimmed RM165 to RM3,549 per tonne, August 2021 narrowed RM222 to RM3,441 per tonne and September 2021 decreased RM248 to RM3,377 per tonne and October 2021 fell RM246 to RM3,347 per tonne
Weekly volume widened to 484,666 lots from 300,823 lots in the previous trading week, while open interest increased to 270,605 contracts versus 250,420 contracts previously.
The physical CPO price for July South advanced RM80 to RM3,700 per tonne. - Bernama