KUALA LUMPUR – The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is likely to trade on an upward trajectory in anticipation of weaker output, a dealer said.
Speaking to reporters, palm oil trader David Ng said the CPO futures prices also will be influenced by strong exports in the near term.
Uncertainties surrounding Indonesia’s CPO export rule and the move by the Indian government to waive import taxes for competing vegetable oils will keep prices high.
Meanwhile, Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said next week the palm oil prices are expected to trade in a wide range of RM5,800 to RM6,500 a tonne with a bearish bias.
“Market focus initially will be on the full month Malaysian palm oil production and export and later on the US Environmental Protection Agency Renewable Fuel Standard final mandate on June 3.”
On Indonesia’s export policy, he said the republic finally gave a respite to the global vegetable oils market by providing some much-needed clarity on its palm oil export policy.
The Indonesian government has allowed one million tonnes of palm oil export in phase one, which is up to May 31, 2023.
The companies listed under the online government portal, the Simirah system, are eligible to apply for export quotas and now the onus is on the logistics sector to push the palm oil out of Indonesia.
According to cargo surveyor Intertek Testing Services on Wednesday, exports of Malaysian palm oil products from May 1 to 5 rose 24.8% to 1,141,764 tonnes from 914,661 tonnes shipped during April 1 to 25.
On a Friday-to-Friday basis, spot month June 2022 rose RM232 to RM6,879 a tonne, July 2022 jumped RM396 to RM6,692 a tonne, August 2022 was RM281 firmer at RM6,353 a tonne, September 2022 gained RM176 to RM6,149 a tonne, October 2022 added RM126 to RM6,043 a tonne and November 2022 increased RM105 to RM5,999 a tonne.
Weekly volume surged to 325,550 lots from 269,576 lots last week, while open interest declined to 204,474 contracts from 315,480 contracts previously.
The physical CPO price for May fell by RM200 to RM6,950 a tonne. – Bernama, May 28, 2022
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