KUALA LUMPUR – The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is likely to move higher next week, underpinned by improving export data.
Singapore-based Palm Oil Analytics owner and co-founder Sathia Varqa said this is based on data by cargo surveyor Intertek Testing Services, which shows Malaysia’s exports for the May 1-10 period up 29.63% to 447,225 tonnes from 345,010 tonnes in the same period in last month.
Similarly, cargo surveyor Amspec Malaysia said exports in the same period rose 36.85% to 469,875 tonnes from 343,356 tonnes.
“Trading next week will be based on May 1-15 Malaysian export data, which is expected to be higher, but at a slower pace than the May 1-10 data,” Varqa told Bernama.
Palm oil trader David Ng said CPO futures are expected to trade on an upward bias, given the strong performance in the Chicago bean oil market.
Kenanga Research, meanwhile, projected May’s production growth to increase 4.6% on-month as Sabah and Sarawak continue their growth trajectory, and exports to rise 19.6% over the same period ahead of the Aidilfitri festive season and potential stockpiling activities by China and India.
“We expect total demand to outstrip total supply, leading to lower ending stocks of 1.46 million tonnes, equivalent to a 5.6% month-on-month drop.”
CPO traded for only three days in this holiday-shortened week.
Bursa and its subsidiaries are closed from noon on Wednesday until tomorrow.
On a weekly basis, CPO futures contracts were mostly higher, with only May declining RM83 to RM4,800 per tonne, June rising RM71 to RM4,749, July firming RM79 to RM4,506 per tonne, and August improving RM68 to RM4,285 per tonne.
With the three-day trading, volume dropped to 156,560 lots from 281,343 in the previous week, while open interest lost to 228,824 contracts from 277,416 in the same period.
The physical CPO price for May South was lower by RM10 at RM4,820 per tonne. – Bernama, May 15, 2021
