Bullish Export Data To Fuel Palm Futures

CRUDE palm oil (CPO) futures on Bursa Malaysia Derivatives are expected to trade higher next week as lower stocks and positive export data will continue to fuel the market, a dealer said. "The market is supported by bullish export figures and lower stocks," he said, adding that immediate support for CPO futures is seen at RM2,240.

As for resistance price, he said it would be RM2,400 per tonne. Meanwhile, concerns of a possible squeeze in global vegetable oil supply remained high. Other factors, including fears of bad weather in soya oil producing US, will further boost the commodity, said another dealer.

Malaysia is the world's second biggest palm oil producer, after Indonesia. Palm oil now accounts for almost 30 per cent of the global edible oil sales. The Malaysian Palm Oil Board (MPOB) said stocks in March 2009 fell 12.89 per cent to 1.364 million tonnes from 1.566 million tonnes in the previous month.

It said stocks of crude palm oil declined 28.14 per cent to 652,442 tonnes in March while processed palm oil increased 8.15 per cent to 711,215 tonnes. During the week, the local market touched a six-month high on positive export figures as well as lower end-March stock figures released by MPOB.

On a Friday-to-Friday basis, April 2009 was up RM136 to RM2,417 per tonne, May 2009 rose RM200 to RM2,430 per tonne, June 2008 increased RM134 to RM2,299 per tonne and July 2009 jumped RM121 to RM2,249.

The week's turnover stood at 67,770 lots, down from last week's 92,773 lots, while open position dropped to 86,545 contracts on Friday from 89,307 contracts at the end of last week. On the physical market, April South was traded higher at RM2,430 per tonne on Friday compared to RM2,300 per tonne, previously. -- Bernama