CRUDE palm oil (CPO) futures prices on Bursa Malaysia Derivatives closed higher yesterday with the benchmark three-month contract at a new 33-month high, dealers said.
They said March 2011 increased by RM64 to close at RM3,852 per tonne.
CIMB Bank, in a research note, said the bullish CPO market was due to concern that shrinking supplies may not be able to keep up with demand in 2011, as production continued to take its toll from disrupted harvests in Indonesia and Malaysia.
“Near term futures are in greater demand, with the Chinese New Year around the corner,” it said.
It said the narrowing soya-palm oil premiums may limit the pace of palm oil appreciation.
“Spreads have narrowed almost 38 per cent week-on-week to US$36.88 per tonne,” it said.
On the futures market, January 2011 gained RM71 to close at RM3,885 per tonne, February 2011 was up RM53 to RM3,873 and April 2011 was RM66 higher at RM3,834.
Turnover increased to 14,768 lots from last Thursday’s 14,510 yesterday while open interest increased to 88,544 contracts from 87,737 previously.
On the physical market, January South went up to RM3,860 per tonne from RM3,820 recorded last Thursday.
Source : Business Times