Crude Palm Oil (CPO) futures prices on Bursa Malaysia Derivatives are expected to be marginally higher next week due to lower production, dealers said.
They predicted that the February stock will drop further and this will in turn, push prices up.
The Malaysian Palm Oil Board (MPOB) in a statement this week said that total palm oil stocks in January 2010 declined to 2.1 million tonnes from 2.24 million tonnes from the previous month, due to higher exports and lower production during the month.
Of the total, CPO stocks went down to 1.131 million tonnes from 1.197 million tonnes in December 2009.
Total CPO production in January 2010 was lower at 1.321 million tonnes compared to 1.52 million tonnes in the previous month while palm kernel production dropped to 343,123 tonnes from 391,814 tonnes previously.
However, another dealer said the gains are expected to be capped as most traders will likely take a heavy position due to the short trading week.
The market will be closed on Monday and Tuesday for the Chinese New Year celebration.
The local market is also expected to take cue from the soyoil prices, the dealer added.
On a Friday-to-Friday basis, February 2010 gained RM50 to RM2,575 per tonne, March 2010 rose RM56 to RM2,586 per tonne, April 2010 increased RM58 to RM2,579 per tonne and May 2010 advanced RM61 to RM2,580 per tonne.
The total weekly turnover declined to 62,067 lots from 64,973 lots last week and open interests increased to 78,551 contracts against 74,744 previously.
On the physical palm oil market, February South increased to RM2,590 per tonne from RM2,530 per tonne last week. — Bernama
Source : Business Times
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