Viral News

CPO futures expected to remain strong until year end

KUALA LUMPUR, Oct 6 — The crude palm oil (CPO) futures is expected to remain strong until year-end following the price which passed RM5,000 a tonne today, which is an all-time high.

The CPO price for October 2021 surged to RM5,050 a tonne after hitting an intraday trade record at RM5,000 a tonne yesterday.

Palm oil trader David Ng said the prospect of lower production as well as the robust demand from China, which is currently in the midst of an energy supply crisis, may increase the intake of palm oil for biofuel.

“However, as prices inched higher, demand will start to taper off as importers are searching for alternative vegetable oils,” he told Bernama.

Malaysian Palm Oil Association (MPOA) revealed today that the CPO production for September 2021 declined 1.44 per cent to 1.68 million tonnes compared to August 2021.

Meanwhile, Singapore-based Palm Oil Analytics’ owner and co-founder Dr Sathia Varqa said CPO futures is likely to undergo a technical correction after the release of Malaysian Palm Oil Board’s (MPOB) data next week.

“Given palm is still the cheapest but the spread to other oils like Special Fuel Oil is narrowing demand and rationing will take place.

“Destination buying will slowdown if cash offers remain high,” he said.

He added that big buyers like China are out for this week due to the Golden Week holiday.

Hence, the market will know if there is an appetite for such high prices later, he added.

Vegetable oil complex analyst and Sunvin Group India research head Anilkumar Bagani said for the Indian market, palm oil stocks at the end of September 2021 surged to 600,000 tonnes from 377,000 tonnes in mid-September 2021.

He said October 2021 palm oil import lineups are also fairly higher.

Therefore, Anilkumar said the import and processing margins for palm oil are in negative territory and importers would be in a cautious mode.

“They will remain aside until a reasonable downside correction is seen at the origins and recovery of the import margins,” he said.

— BERNAMA


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