KUALA LUMPUR – Crude palm oil (CPO) futures contracts on Bursa Malaysia Derivatives ended higher on the first trading day of 2023 on concerns over weaker output, in line with the seasonal weakness, a dealer said.
Palm oil trader David Ng said the prospect of higher demand ahead of Indonesia’s implementation of its B35 biodiesel programme next month also helped to lift the commodity’s price.
“The prospect of higher demand arising from Indonesia’s B35 biodiesel programme next month seems positive as the higher blend requires higher consumption.
“Due to seasonal factors, I expect the weaker output to continue till at least after Chinese New Year.
“We locate support at RM4,000 per tonne and resistance at RM4,400 per tonne,” he said.
Meanwhile, Singapore-based Palm Oil Analytics owner and co-founder Sathia Varqa said CPO futures started off the year on a very strong note, extending gains from the last trading day in 2022.
“Lower output outlook for the first quarter of 2023 and steady export in December 2022 are supportive of prices, shrugging off any profit-taking motive or the weaker soybean oil close on the Chicago Board of Trade,” he said.
Sathia said the futures prices today also dismissed the aggregate demand slowdown following the International Monetary Fund warning that a third of the global economy will be in recession this year.
At the close, January 2023 advanced RM94 to RM4,265 per tonne, February 2023 gained RM92 to RM4,254 per tonne, March 2023 was RM79 higher at RM4,253 per tonne, and April 2023 increased RM70 to RM4,229 per tonne.
May 2023 climbed RM59 to RM4,199 per tonne and June 2023 rose RM50 to RM4,159 per tonne.
Total volume narrowed to 50,680 lots from 56,749 lots last Friday while open interest improved to 202,351 contracts from 200,198 contracts previously.
The physical CPO price for January South rose RM80 to RM4,260 per tonne. – Bernama, January 4, 2023
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