Crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to see range trading next week with sentiment remaining cautious against a backdrop of surplus stock and slow demand.
Jim Teh, Interband Group of Companies Senior Palm Oil Trader said prices were anticipated to hover between RM2,650 and RM2,750 a tonne.
He said despite the huge stock position, margins were still attractive as production cost was only between RM1,200 and RM1,500 per tonne.
Externally, the market would continue to be influenced by waning optimism over the European debt crisis.
European leaders are scheduled to meet over the weekend to discuss deals to support its financial sector and to contain the crisis that could hamper economic growth and commodity demand.
For the week just-ended, futures prices were mixed as traders remained concerned over the uncertain global market situation coupled with slow demand especially from India which had already stocked up on the edible oil ahead of the Deepavali festival. On a Friday-to-Friday basis, November 2011 shed RM7 to RM2,881 a tonne, December 2011 lost RM20 to RM2,886 and January 2012 was fell RM92 to RM2,883.
Weekly volume dropped to 21,057 lots, from 21,641 lots, recorded last week while open interest decreased to 138,673 contracts against 143,338 contracts registered last week.
On the physical market, October South eased RM10 to RM2,890 a tonne. — Bernama
Source: Business Times