Crude palm oil (CPO) futures on Bursa Malaysia Derivatives are likely to
trade higher next week on expectations of lower production.
A dealer said prices should be rising further due to concerns over further tightening in the global vegetable oil supply.
“The price outlook remains bullish as investors expect palm oil
stocks to continue being tight in the near term but demand for CPO is
growing,” he said.
He said the local CPO market would also closely track soyoil prices on the Chicago Board of Trade (CBoT).
Soyoil and palm oil compete for the same export destinations and their prices often move in tandem.
During the week just ended, the market was open only on Monday and
Wednesday due to holidays in conjunction with Federal Territory Day and
Chinese New Year celebrations.
It ended higher due to supply constraints and the uptrend of soybean futures on CBoT.
On a weekly basis, February rose RM158 to RM3,923 per tonne, March
increased RM172 to RM3,915, April advanced RM195 to RM3,895 and May
gained RM194 to RM3,845.
Total turnover declined to 30,084 lots from 112,267 lots last
week while open interest increased to 89,398 contracts from 92,488
On the physical market, February South increased RM110 to RM3,870 per tonne on Wednesday