The Sun Daily (10/11/2019) - KUALA LUMPUR: Concerns about supply shortfalls and higher export scenario sentiment saw Malaysia’s crude palm oil (CPO) continue its uptrend mode after recording its first major recovery in October, surpassing the 2018 level for the first time.

Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa said October’s CPO futures jumped 15% or RM318 and retained the healthy gains in November, rising by RM111 or 4.51% to a new high on Friday.

At Friday’s close, CPO futures January 2020 ended at a 22-month high of RM2,573 per tonne on last-minute buying interest, while in the physical market, November South was RM20 better at RM2,480 per tonne.

Quoting the Malaysian Palm Oil Association, Sathia said October production output was up by 1.02% from the previous month, which was a lower pace compared to the 13% and 6% rise in October 2017 and October 2018, respectively.

On average, October production rose by 1.61% to 1.871 million tonnes. The five-year average of October production is at 1.916 million tonnes.

He said the October output data is critical to determine the full year estimate after a lacklustre production in August and September.

“August, September and October are the three peak production months in Malaysia, making up 35% of the annual output,” he told Bernama.

Sathia said the actual Malaysian Palm Oil Board (MPOB) data, today, will further reinforce the market fundamental.

MPOB previously forecast CPO production will start to decline from November until December, following the normal downward production trend.

The output increased by 1.2% to 1.8 million tonnes in September and 4.64% to 1.82 million tonnes in October.

The board also forecast that the Malaysian palm oil production to rise to 20.3 million tonnes this year against 19.5 million tonnes last year due to the expected good weather. – Bernama

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