BERNAMA – Crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trade with a downward bias next week on weak global sentiment, dealers said.
Interband Group of Companies senior palm oil trader Jim Teh said the market would see further profit-taking next week, moving within the range of RM3,700 to RM3,900 per tonne as prices had gone up too high recently.
“The high stocks level in Malaysia and Indonesia is pressuring the prices. However, prices will be supported by demand from Pakistan, India and China which are buying for the Muslim festive season,” he told Bernama.
Meanwhile, Mumbai-based Sunvin Group Commodity Research Head Anilkumar Bagani said the CPO market would continue to be influenced by weak global sentiment, with the United States (US) banking crisis injecting overall bearish sentiment across asset classes.
“Since late 2022, CPO prices had been supported by market expectations of significantly higher biodiesel consumption and lower exports from Indonesia, as well as the impact of heavy rainfall at the start of 2023 on output.
“However, the latest production data from Malaysia and Indonesia indicate that yields are on an uptrend.
“The shortage of foreign workers in Malaysia is also being addressed at a rapid pace and is likely to be resolved by the first half of 2023. This weighs on the sentiment and CPO prices,” he added.
For the week just ended, palm oil traded mostly lower except on Tuesday, tracking the movement of rival vegetable oils amid weaker global sentiment particularly dominated by the recent collapse of US banks and lower crude oil prices.