CPO Futures May Extend Uptrend

Crude palm oil (CPO) futures prices on Bursa Malaysia Derivatives are

likely to extend their upside trend next week, but gains could be

limited due to profit-taking, dealers said.

A dealer said the CPO price was likely to move between RM3,800 and RM4,000 per tonne next week.

MIDF Research, in its equity note, said demand would spike in the short

term and growth would be steady in the long term supported by strong

demand from China and India.

The research house said consumption in China was expected to increase by eight per cent this year and 10 per cent in India.

MIDF Research said the CPO price was likely to hit RM4,000 per tonne in

the first quarter this year, driven by strong demand for the coming

Chinese New Year, which falls on Feb 3.

A dealer the market

players would remain on the sidelines ahead of the release of Malaysian

palm oil stocks by the Malaysia Palm Oil Board on next Monday.

For the week just-ended, the CPO prices were traded mostly higher except

on Wednesday and Friday when the market retreated on profit-taking and

to the downtrend in other commodities.

On Thursday-to-Friday

basis, January 2011 declined RM14 to RM3,800 per tonne, February 2011

slipped RM20 to RM3,800, March 2011 dropped RM25 to RM3,763 and April

2011 fell RM33 to RM3,735.

Turnover declined to 91,906 lots from 55,382 last week while open position slipped to 90,806 contracts from 87,737 previously.

On the physical market, the January South contract ended the week at RM3,820 per tonne. — Bernama

Source : Business Times

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