BERNAMA – The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trade in a cautious mode next week, a dealer said.
Interband Group of Companies senior palm oil trader Jim Teh said prices would likely hover between MYR3,300 and MYR3,400 per tonne.
“Nevertheless, the year 2020 saw an excellent performance by the palm oil industry despite the turmoil caused by COVID-19 pandemic,” he told Bernama.
However, he said traders might also have to be careful as commodity prices would normally have their ups and downs.
Commenting on the effects of the US Customs and Border Protection’s (CBP) action of detaining Sime Darby Plantation Bhd ‘s (SDP) products, Teh said traders would likely be cautious too, which would also affect demand for the local palm oil in the coming weeks, especially from the United States (US), Canada and the European Union.
“The demand from them will slow down. Moreover, the international players will not speculate in the market unless the problem is being resolved,” he said.
The United States (US) is banning palm oil and products containing palm oil produced by SDP and its subsidiaries, joint ventures, and affiliated entities in Malaysia based on allegations of forced labour in SDP’s production process.
For the week just ended, the CPO price was mostly higher, backed by firmer soybean oil prices as well as lower palm oil output and stockpiles.
On a weekly basis, CPO futures contract for January 2021 increased MYR37 to MYR3,891 per tonne, February 2021 rose MYR49 to MYR3,764 per tonne, March 2021 surged RM31 to RM3,600 per tonne, and April 2021 added MYR26 to MYR3,473 per tonne.
Weekly volume narrowed to 138,285 lots from 212,577 lots in the previous week, while open interest eased to 196,440 contracts from 210,643 contracts a week earlier.
The physical CPO price for January South slipped MYR10 to MYR3,870 per tonne.