KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to consolidate at current levels next week.
Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa however said the market will remain cautious as traders await the Malaysian Palm Oil Board (MPOB) report on the January 2020 palm oil production to be released on Monday.
“The price will remain high due to the expectation of lower production for January,” he told Bernama.
On Feb 5, the Malaysian Palm Oil Association (MPOA) released data which showed that palm oil production in January 2020 fell 15.53% to 1.13 million tonnes compared with December 2019.
Meanwhile, Sathia projected that palm oil exports orders would fall especially from China amidst the ongoing 2019 novel coronavirus outbreak.
For the week just ended, the market was traded mostly higher in anticipation of lower production, better performance of soybean oil price, as well as expectations of firmer demand following news of Pakistan’s interest in importing more palm oil from Malaysia.
On a Friday-to-Friday basis, the CPO futures contract for February 2020 added RM232 to RM2,872 per tonne, March 2020 gained RM229 to RM2,860 per tonne, April 2020 rose RM209 to RM2,813 per tonne, and May 2020 surged RM201 to RM2,774 per tonne.
Weekly turnover reduced to 314,124 lots from 339,279 lots in the previous week, while open interest slumped to 315,771 contracts from 331,097 contracts.
On the physical market, the CPO price for February South jumped RM240 to RM2,940 per tonne. – Feb 08, 2020, Bernama.
