KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is likely to remain range-bound with a downward bias this week as traders anticipate a weaker export phase in the coming weeks owing to recent high prices.Palm oil trader David Ng said for the week just ended, the commodity’s price rallied above RM3,900, the highest in 13 years (since March 3, 2008), as the Malaysian Palm Oil Board (MPOB) reported lower-than-expected stock levels in the country.The all-time high price for CPO futures is RM4,321, registered in March 2008.
“Prices are expected to stay in the range of between RM3,950 and RM4,180 next week,” he told Bernama.On Wednesday, MPOB reported that total palm oil stocks decreased 1.80 per cent month-on-month to 1.30 million tonnes in February.It also revealed that production fell to a five-year low of 1.1 million tonnes last month while Malaysia’s palm oil exports fell to 896,000 tonnes in February from 947,000 tonnes in January, the lowest level since 2012, due to record high prices and renewed export duties.
CGS-CIMB Research said in a note that smaller-than-expected Malaysian supplies and persistent weather woes in South America worsened a global edible oil supply squeeze. “The price is considered a psychological level for bulls looking to test the tropical oil’s record intraday high of RM4,486 a tonne,” it said.For the week just ended, the market traded higher, tracking the better performance of soybean oil prices as well as rebound in crude oil prices. On a weekly basis, CPO futures contracts for March 2021 gained RM336 to RM4,283 per tonne, April 2021 added RM385 at RM4,274 per tonne, May 2021 increased RM384 to RM4,125 per tonne, and June 2021 added RM394 to RM3,988 per tonne.Weekly volume soared to 360,756 lots from 268,358 lots the previous week, while open interest increased to 256,238 contracts from 251,949 contracts contracts a week earlier. The physical CPO price for March South jumped by RM340 to RM4,300 per tonne.
Source : DailyExpress