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Falling demand for crude palm oil continues to drag CPO futures lower
calendar01-12-2023 | linkThe Edge Markets | Share This Post:

11/01/2023 (The Edge Markets), Kuala Lumpur - The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives extended its downtrend to end lower on Wednesday amid falling demand for the commodity, a dealer said.


Cargo surveyor Societe Generale de Surveillance reported that exports of Malaysian palm oil products for Jan 1-10 fell 44.6% to 262,201 tonnes from 473,086 tonnes shipped during the same period last month.


Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said CPO futures have continued to trend lower, tracking weakness in Chinese vegetable oil futures and soybean oil on the Chicago Board of Trade (CBOT).


"Chinese vegetable oil futures continued to drop sharply for the second straight day as euphoria over China's economic reopening (fades).


"We expect deeper profit-taking in Chinese equity and commodity markets ahead of the festive season and also see no major buying attempt of palm oil from China," he told Bernama.


Palm oil trader David Ng reckons that the expectation of weaker output will continue to support prices in the near term, putting the support at RM3,800 and resistance at RM4,200.


At the close, the January 2023 and February 2023 contracts lost RM64 to RM3,823 and RM3,897 per tonne respectively, while March 2023 was RM73 lower at RM3,911.


The April 2023 note weakened by RM83 to RM3,918 per tonne, while May 2023 and June 2023 edged down RM68 each to RM3,927 and RM3,929, respectively.


Total volume narrowed to 63,696 lots from 82,358 lots on Tuesday, while open interest eased to 194,922 contracts against 197,336 previously.


The physical CPO price for January South slipped by RM100 to RM3,900 per tonne.