CRUDE palm oil futures on Bursa Malaysia Derivatives is likely to be
lower this week due to rising concerns that the stronger ringgit may
make local exports less competitive, dealers said.
CPO is also expected to subside as many countries, especially in the
Middle East, have stocked up their needs for the upcoming Hari Raya
Aidilfitri, said Interband Group of Companies senior palm oil trader Jim
The ringgit appreciated further after Bank Negara
announced midweek moves to further liberalise the local currency which
will see the ringgit being used in trade settlements.
subsequently pushed the local unit to a 28-month high on Thursday after
recording the highest level since April 28, 2008. It was traded at
3.1280 to the US dollar at the opening.
As for demand for CPO, Teh said demand would likely be lower in the
coming weeks especially with commodity prices currently at higher
“We are satisfied with prices now which are hovering at
about RM2,500 per tonne. For producers, it means they are getting 100
per cent returns as opposed to the cost of production which is at about
RM1,200 to RM1,500 per tonne,” he said.
However, if India – the
second largest consumer of vegetable oils, continues to increase their
exports in the coming months, it will likely be a boost to the local
market, he said.
Teh said the price is expected to move between RM2,500 per tonne and RM2,550 per tonne.
On a Friday-to-Friday basis, September 2010 contract dropped RM74 to
RM2,706 per tonne, October 2010 lost RM82 to RM2,608 per tonne and
November 2010 was RM174 lower to RM2,544 per tonne.
August 2010 contract expired on Monday with RM2,779 a tonne while new
contract month, Dec 2010 stood at RM2,531 per tonne.
higher at 113,927 lots compared with 99,077 lots last Friday while open
interest stood at 67,893 contracts against 63,861 contracts at the end
of last week.
As for the cash market, August South dropped
RM85 to RM2,735 per tonne compared from last Friday’s RM2,820 per tonne.