BUSINESS

CPO FUTURES END LOWER, BUT LOSSES CAPPED BY BULLISH COMMENTS FROM INDUSTRY EXPERTS

24/03/2021 08:52 PM

By Nurul Hanis Izmir and Durratul Ain Ahmad Fuad

KUALA LUMPUR, March 24 -- The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives retreated to end lower on Wednesday, erasing gains for the past two days, after tracking the weaker overnight soybean oil performance on the US Chicago Board of Trade (CBOT), dealers said.

Palm oil trader David Ng, however, said the lower CPO will reverse, thanks to bullish comments from industry experts during the two-day Virtual Palm and Lauric Oils Price Outlook Conference 2021 held since yesterday.

At the event, Thomas Mielke, executive director of Hamburg-based Oil World, said CPO prices will likely weaken from the current levels if the global production of oilseeds rebounds, but will stay elevated throughout 2021.

“Global palm oil supplies will likely remain tight in the foreseeable future, limiting the price declines for the rest of 2021,” he said.

LMC International chairman James Fry said the new June 2021 benchmark month may drop to the RM3,300 per tonne level by the fourth quarter as a recovery in production gradually boosts stockpiles.

“The perfect storm of low production worldwide created a big problem for the supply of oils. The tight supplies were compounded by the failure of governments to ease biofuel mandates temporarily to take pressure off demand, unlike in 2016-2017, and end the explosive bull market,” he said.

Separately, MIDF Research, via its note, said export demand for CPO is expected to recover this year on the back of gradual recovery of economic activities in India and China, current low stocks, as well as restocking activities ahead of the month of Ramadan.

At the close, the CPO futures contract for April 2021 fell RM13 to RM4,220 per tonne, May 2021 eased RM6 to RM4,078 per tonne, June 2021 down RM7 to RM3,923 per tonne, while July 2021 was RM6 lower at RM3,796 per tonne.

Total volume rose 68,627 lots from 66,995 lots on Tuesday, while open interest improved to 251,209 contracts from 251,113 contracts previously.

The physical CPO price for April South lost RM30 to RM4,230 per tonne.

-- BERNAMA


BERNAMA provides up-to-date authentic and comprehensive news and information which are disseminated via BERNAMA Wires; www.bernama.com; BERNAMA TV on Astro 502, unifi TV 631 and MYTV 121 IFLIX channels and BERNAMA Radio on FM93.9 (Klang Valley), FM107.5 (Johor Bahru), FM107.9 (Kota Kinabalu) and FM100.9 (Kuching) frequencies.

Follow us on social media :
Facebook : @bernamaofficial, @bernamatv, @bernamaradio
Twitter : @bernama.com, @BernamaTV, @bernamaradio
Instagram : @bernamaofficial, @bernamatvofficial, @bernamaradioofficial
TikTok : @bernamaofficial

© 2024 BERNAMA   • Disclaimer   • Privacy Policy   • Security Policy