Crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is likely to trade on a downward bias next week after recording strong trading in the week just ended, palm oil trader David Ng said.
He said the recent strength in prices might encourage profit-taking activities.
“The CPO is likely to trade between RM3,900 and RM4,200 per tonne next week,” he told Bernama.
Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa said the CPO trading next week would be driven by the release of production and export figures for the first 20 days in February.
He said the active month of May 2023 had crossed RM4,000 per tonne for the first time since Jan 9 propelled by a shift to bullish sentiments sparked by Indonesian government policy to suspend the unutilised export permits to ensure sufficient domestic supply of cooking oils.
“The Indonesian government is trying to boost domestic cooking oil supply in preparation for a surge in Ramadan fasting month demand,” he said.
For the week just ended, palm oil surged above RM4,000 per tonne to a five-week high on Thursday boosted by a weaker ringgit against the US dollar and signs of rebounding demand.
The recent gains in rival soybean oil are also supporting palm.
On a weekly basis, new spot month March 2023 was RM195 stronger at RM4,095 per tonne, April 2023 rose RM197 to RM4,128 per tonne, May 2023 jumped RM199 to RM4,131 per tonne, June 2023 surged RM190 to RM4,109 per tonne and July 2023 soared RM195 to RM4,083 per tonne.
Meanwhile, August 2023 stood at RM4,054 per tonne.
February 2023 contract expired at RM3,884 per tonne on Wednesday.
Total weekly volume expanded to 282,503 lots from 235,346 lots while open interest edged up to 159,937 contracts from 159,313 contracts at the end of last week.
The physical CPO price for February South was RM180 higher at RM4,080 per tonne.
