KUALA LUMPUR, Sept 14 — Crude palm oil (CPO) futures on Bursa Malaysia Derivatives are anticipated to trend lower next week due to ongoing weak demand, according to market experts.
Market Outlook:
Palm oil trader David Ng attributed the anticipated decline in CPO prices to persistent weak demand, especially from major importers China and India. This reduction in demand is partly linked to the recent drop in soybean oil prices. Ng projected that CPO prices will fluctuate between RM 3,750 and RM 3,920 per tonne.
Similarly, Jim Teh, Senior Palm Oil Trader at Interband Group of Companies, expects CPO futures to move lower, driven by high stock levels. Teh pointed out that Malaysia’s palm oil stock rose to 1.83 million tonnes in August 2024, as reported by the Malaysian Palm Oil Board (MPOB). Despite weaker demand from China and India, there is still some physical demand from Pakistan, the United States, the European Union, and Middle Eastern countries.
Weekly Performance:
September 2024: Fell by RM 50 to RM 3,950 per tonne.
October 2024: Decreased by RM 26 to RM 3,909 per tonne.
November 2024: Dropped RM 84 to RM 3,814 per tonne.
December 2024: Slid RM 116 to RM 3,775 per tonne.
January 2025: Declined by RM 123 to RM 3,754 per tonne.
February 2025: Fell by RM 128 to RM 3,743 per tonne.
Trading Activity:
Total Weekly Volume: Increased to 422,487 lots from 305,672 lots the previous week.
Open Interest: Rose to 259,519 contracts from 232,403 contracts previously.
Physical CPO Price:
September South: Decreased by RM 20 to RM 4,010 per tonne from RM 4,030 the previous week.
Public Holiday Notice:
Bursa Malaysia Bhd and its subsidiaries will be closed on Monday, September 16, 2024, in observance of Prophet Muhammad’s birthday and Malaysia Day public holiday. Trading and settlement activities will resume the following day.
Given the current market conditions, CPO futures are expected to continue their downward trend next week, influenced by weak demand and high stock levels.
