CPO Futures Seen Bearish Next Week On High Inventories
By Muhammad Fawwaz Thaqif Nor Afandi
KUALA LUMPUR, May 16 (Bernama) -- Crude palm oil (CPO) futures on Bursa Malaysia Derivatives are expected to trade lower next week, weighed down by high stock levels and profit-taking activities.
Interband Group of Companies senior palm oil trader Jim Teh said that according to data from the Malaysian Palm Oil Board (MPOB), Malaysia’s palm oil stocks stood at 2.3 million tonnes in April, higher than the previous month’s level.
"Driven by the high stock position, CPO futures are expected to trade on a bearish footing next week due to profit-taking, with prices likely to range between RM4,200 and RM4,350 per tonne,” he told Bernama.
Teh said that market speculators are also likely to take advantage of the current geopolitical tensions involving the United States, Iran and Israel.
He added that physical demand is expected to come from key importing countries such as China, India, Pakistan and several Middle Eastern countries, as they continue to build up their stockpiles.
“As a whole, the palm oil industry in Malaysia and Indonesia remains profitable, as the cost of CPO production in Malaysia is about RM3,000 per tonne, while production costs in Indonesia are even lower,” he said.
However, Iceberg X Sdn Bhd proprietary trader David Ng said that CPO futures could trade with a slight upward bias, supported by the recent strength in crude oil prices.
“The rise in crude oil prices has lifted palm oil prices, as the commodity is widely used as a biofuel feedstock.
"Therefore, we expect the market to trade between RM4,300 and RM4,480,” he said
At the time of writing, Brent crude went up 2.49 per cent to US$108.30 per barrel.
On a Friday-to-Friday basis, the May 2026 contract slid RM98 to RM4,380 per tonne, June 2026 slipped RM82 to RM4,390, and July 2026 dropped RM85 to RM4,420 per tonne.
The August 2026 contract declined by RM84 to RM4,437 per tonne, September 2026 fell by RM77 to RM4,449 per tonne, and October 2026 shed RM67 to RM4,465 per tonne.
The weekly trading volume increased to 493,990 lots from 435,410 lots last week, while open interest went up to 285,554 contracts from 281,027 contracts previously.
The physical CPO price for May South declined by RM190 to RM4,440 per tonne.
-- BERNAMA