CPO Prices to Hit RM3,600/MT

Crude

palm oil (CPO) prices will rise to RM3,600 a tonne in the next six to

nine months amid bullish market sentiment, says NextView Chief Market

Strategist Benny Lee.

He said volume growth and appreciation of the ringgit and Chinese

yuan against the US dollar indicated that the price would move up

further.

“In 2006 and 2008, when the US dollar keep declining, CPO prices

shot up to a historical high,” he said during his presentation at the

International Palm Oil Trade Fair and Seminar 2010 today.


CPO futures are now traded at around RM2,650 a tonne.

Lee also said CPO prices would hover around RM2,950 a tonne in the

next three months as long as the prices stayed above the RM2,600 support

level.

“Given the current buying momentum, the price still has room to

increase,” he said, adding that “volume is generally low, therefore

there are no signs of congestion in the market.”

Transgraph Consulting Pvt Ltd Chief Executive Officer Murali Krishna

P.V. said CPO prices would likely be traded at RM3,300 in the next six

months on higher global demand.

In his presentation, he said CPO prices uptrend was boosted by

modest CPO output and soyoil due to adverse weather conditions and

effects of the recovering global economy.

Bursa Malaysia Derivatives Bhd, Product and Market Development,

General Manager Jeffrey Tan Seng Hui said the exchange would introduce

more future palm oil contracts.

The possible contracts are mini crude palm oil, crude palm oil options and USD dollar palm olein, he said in his presentation.


“Introduction of more contracts will strengthen growth of Malaysia’s palm oil industry,” he added. — Bernama

Source : Business Times

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