KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is forecast to trade with a downside bias as the market continues to be plagued with expectations of higher output next week.
Palm oil trader David Ng said the outlook is expected to be bearish following the higher production estimates from Southern Peninsula Palm Oil Millers’ Association (SPPOMA) and Malaysian Palm Oil Association (MPOA).
“We expect the price to hover between RM5,000 and RM5,800 per tonne,” he told Bernama.
For the week just ended, the Malaysian CPO futures were mostly lower on concerns over weaker demand following the lifting of Indonesia’s CPO export ban and expectation of higher production in the coming weeks.
On a Friday-to-Friday basis, spot month July 2022 slid RM464 to RM5,679 a tonne, August 2022 narrowed RM396 to RM5,524 a tonne, September 2022 decreased RM312 to RM5,454 a tonne, October 2022 shrank RM248 to RM5,429 a tonne, November 2022 shed RM225 to RM5,440 a tonne and December 2022 was down by RM159 to RM5,460 a tonne.
Total volume jumped to 397,816 lots from 258,636 lots in the previous week, while open interest rose to 298,491 contracts from 221,157 contracts.
The physical CPO price for June South remains unchanged at RM6,550 a tonne. – Bernama