Crude palm oil (CPO) futures contracts on Bursa Malaysia Derivatives (BMD) extended its upward trend on Tuesday given strong buying activities from India amid low stocks.
India, the world’s leading vegetable oil buyer, is preparing for a festive season next month, palm oil trader David Ng told Bernama.
Singapore-based Palm Oil Analytics’ owner and co-founder Sathia Varqa said according to a trade body, the country imported 1.4 million tonnes of vegetable oils in August from 1.21 million tonnes in July.
Of these, 994,997 tonnes were palm oil, higher than the 530,420 tonnes imported in July. The rest were soy oil and sunflower oil at 244,697 tonnes (July: 519,566 tonnes), and 135,308 tonnes (July: 155,300 tonnes), respectively.
In addition, the stronger soybean oil market also helped to propel futures prices higher.
Both soybean oil prices on the Chicago Board Of Trade (CBOT) And China’s Dalian Commodity Exchange traded higher.
Kenanga Research said palm oil prices have dipped by 30% since June 2022 but remained relatively firm, considering that peak season is here and demand is just picking up.
“While prices may stay muted for a month or so, record discounts to soybean oil prices, pending Deepavali demand from India and rising biodiesel sales, are supportive of palm oil prices.
“Chinese imports, which can be among the biggest, should also improve when the country reverts to a new post-Covid normal,” it said in a note.
The research house projects CPO price to end 2022 at RM4,500 per tonne.
At the close, the CPO futures contracts for the spot month of September 2022 was RM185 higher at RM3,735 per tonne, October 2022 rose by RM212 to RM3,839, November 2022 added RM217 to RM3,900, and December 2022 gained RM220 to RM3,942 per tonne.
January 2023 contracts increased RM219 to RM3,981 per tonne and February 2023 went up RM207 to RM4,014 per tonne.
Total volume increased to 66,684 lots from 46,987 on Monday, while open interest widened to 262,775 contracts from 243,327, previously.
Physical CPO price for September South inched up by RM250 at RM3,900 per tonne.
