CPO Futures Rebound on Price Forecasts

CRUDE palm oil (CPO) futures contract prices on Bursa Malaysia Derivatives, which have been on the downtrend for the two days, improved yesterday on new price forecasts, dealers said. Top industry analyst Dorab Mistry revised upwards his forecast, saying that Malaysian palm oil prices may rise up to 21 per cent by the first quarter of 2010 from the current level. According to Mistry, local CPO is expected to increase to between RM2,800 and RM3,000 per tonne from an earlier forecast of RM2,400 per tonne.

He attributed this to strong demand as hot weather conditions are expected to affect production yields. On Thursday, Thomas Mielke, publisher of the Hambury-based “Oil World”, projected Malaysia’s crude palm oil prices to go up 13.6 per cent to US$836 per tonne (US$1.00 = RM3.40) in the first half of 2010. “We saw follow-through buying today. You can see the volume. It surged sharply from the previous day,” said one of the dealers yesterday. Spot month December 2009 yesterday rose RM56 to settle at RM2,490 per tonne and January 2010 added RM85 to RM2,550 per tonne. February 2010 went up RM84 to RM2,562 per tonne and March 2010 increased by RM76 to RM2,557 per tonne. Volume surged to 22,897 lots from Thursday 9,894 lots while open interest rose to 90,022 contracts from 89,092 contracts previously. On the physical market, December South was higher at RM2,500 per tonne compared to RM2,430 per tonne previously. Source : Business Times

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