Strong Demand to Buoy CPO Futures

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

likely to be firm next week on the back of rising overseas demand,

dealers said.

A dealer said strong demand for palm oil from India, China and the

Middle East will continue to support the market in the foreseeable

future.

“Concerns over external factors like the US soyoil production being

disrupted by unfavourable weather conditions has also buoyed the palm

oil market,” he added.

Meanwhile, Interband Group of Companies senior trader Jim Teh said

prices should remain in the comfortable range of RM3,200 to RM3,300,

which will attract physical buyers rather than see paper trade in the

market.


“Physical buyers should be given the priority as stock levels are still high,” he said.

On Wednesday, weak US job data, triggered a broad-based soft

commodities sell down with indications that the US manufacturing sector

may slow to its lowest since 2009.

In another development, the government launched the B5 fuel

containing five per cent biodiesel made from palm oil in Putrajaya, and

is planning to expand distribution in the future.

The Malaysian Palm Oil Board (MPOB) is expected to release its May

palm oil stock levels data on June 10, with market talk indicating it

would increase to the range of between 1.7 million to 1.8 million tonnes

from the 1.67 million tonnes reported in April.

On a weekly basis, June 2011 ended RM66 lower at RM3,478 per tonne,

July 2011 lost RM42 to RM3,448 per tonne, August 2011 dropped RM17 to

RM3,421 while September 2011 gained RM4 to RM3,412.

Turnover was lower at 110,021 lots compared to the 110,484 lots last

week, while the open position rose to 109,727 contracts from 106,927

contracts previously.

On the physical market, June South ended the week at RM3,480 per tonne. — Bernama


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