Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa said exports to the country will drive higher supply in the near term.
“China needs to buy the crop at least next week because it usually takes 10 to 12 days for the commodity to arrive in the country before Chinese New Year on Jan 25,” he told Bernama.
Furthermore, Sathia said the market sentiment was also supported by the finalisation of the phase one trade deal between the US and China expected to be signed soon.
“Supportive external event of US-China trade deal next week will give a positive momentum to CPO prices,” he said.
For the week just ended, the market was mixed on weaker production as well as the reinstatement of the CPO export tax on Jan 1 and restriction on imports of refined palm oil and palm olein by India.
On a Friday-to-Friday basis, the CPO futures contract for January 2020 rose RM21 to RM3,131 per tonne, February 2020 expanded RM19 to RM3,145, March 2020 increased RM18 to RM3,134 and April 2020 added RM12 to RM3,110 per tonne.
Weekly turnover increased to 288,983 lots from 164,912 lots in the previous week, while open interest rose to 279,059 contracts versus 267,359 contracts.
On the physical market, the CPO price for January South gained RM20 to RM3,140 per tonne. – Jan 11, 2020 Bernama
