CPO futures to trade in range-bound mode next week

KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to see muted trading next week at between RM3,450 and RM3,750 per tonne, said a dealer.

Palm oil trader David Ng said it might be slightly negative bias pending the expectation of sluggish export performance next week.

“The announcement on the CPO export tax recently will dampen the demand for the commodity,” he told Bernama.

According to a circular posted on the Malaysian Palm Oil Board’s website published last Thursday, the Royal Malaysian Customs Department said the CPO export tax is retained at 8 per cent for March 2021 for the value of RM3,977.36 per tonne.

At this reference price, the duty payable will therefore be RM318.19 per tonne or US$78.88, compared to RM292.61 per tonne or US$72.52 in February (reference price: RM3,657.67 per tonne).

For the week just ended, the market was traded mostly higher tracking the better performance of soybean oil prices on the Chicago Board of Trade as well as stronger export data.

On a weekly basis, CPO futures contracts for March 2021 rose RM78 to RM3,914 per tonne, April 2021 firmed RM154 to RM3,712 per tonne, May 2021 increased by RM176 to RM3,522 per tonne, and June 2021 gained RM180 to RM3,380 per tonne.

Weekly volume perked to 324,566 lots from 201,652 lots the previous week, while open interest advanced to 256,112 contracts from 220,640 contracts a week earlier.

The physical CPO price for February South is weaker by RM10 to RM3,930 per tonne. – Bernama

Source : The Star

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