KUALA LUMPUR: Crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives closed lower today on technical correction and pessimistic exports outlook.
“The market was in rapid correction mood, erasing 147 points in just two days pushing prices to the lowest in the year,” Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa said.
The benchmark month March 2020 saw a big drop of 60 points, he added.
The market downtrend is also attributed to weak exports forecast as the Jan 1-15 data showed a rise of just 3.20%.
He said the current sell-off and a further reduction in shipments to India will put pressure on the market.
“(Reduction in) India’s import is a catalyst for the sharp correction,” he said, adding that bookings from China were low as shipments would temporarily halt due to the Chinese New Year holidays.
Varqa said market players were looking for fresh direction based on the Jan 1-15 output data to be released by the Southern Peninsular Palm Oil Millers’ Association and price outlook from the Malaysian Palm Oil Board at the Palm Oil Economic Review and Outlook Seminar 2020 tomorrow.
The April 2020 month will be the new benchmark contract effective tomorrow.
At the close, the CPO futures contract for January 2020 was unchanged at RM3,030 per tonne, February 2020 fell RM49 to RM2,981 per tonne, March 2020 shed RM60 to RM2,945 per tonne, and April 2020 eased RM69 to RM2,909 per tonne.
Volume increased to 82,230 lots from Tuesday’s 54,671 lots and open interest rose to 322,682 contracts from 291,658 contracts previously.
On the physical market, January South ended at RM3,060 per tonne today. – Jan 15, 2020 Bernama
