CPO Mart Could See Mild Consolidation

Crude palm oil (CPO) futures on Bursa Malaysia Derivatives are likely to

consolidate next week after hitting a three-and-a-half-week low this

week on weak fundamentals.

“The CPO market is currently volatile and perhaps it could see some

mild consolidation next week,” Interband Group Senior Palm Oil Trader

Jim Teh said.

He said that based on the current bearish trend, prices could fall

further to around RM2,350 and RM2,400 per tonne.

Lingering concerns over the European debt crisis and tighthening of

China’s monetary policy could dampen the fragile recovery and curb

demand for commodities, he said.

“All these worries have affected the behaviour of commodities buyers,

especially on our CPO market who are mostly international buyers,” he


Most buyers also adopted a wait-and-see attitute ahead of the palm

oil export numbers for the first 15 days of May, which are due for

release by cargo surveyors next Monday.

On Friday-to-Friday basis, the May 2010 contract went down by RM46

to RM2,512 per tonne while June 2010 slipped RM64 to RM2,470 per tonne,

July 2010 contract declined RM63 to RM2,456 per tonne and August 2010

contract lost RM67 to RM2,447 per tonne.

A total of 56,647 lots were transacted this week, down from last

week’s 70,198 lots.

On Friday, open interest stood at 65,539 contracts compared with

65,625 contracts at the end of last week.

As for the cash market, May South was traded lower at RM2,500 per

tonne from RM2,570 per tonne.. — Bernama

Source : Business Times

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