05/10/2010 (Bernama), Kuala Lumpur - Crude palm oil (CPO) prices will rise to RM3,600 a tonne in the next six to nine months amid bullish market sentiment, says NextView Chief Market Strategist Benny Lee.

He said volume growth and appreciation of ringgit and Chinese yuan against the US Dollar indicated that the price would move up further.

"In 2006 and 2008, when the US dollar keep declining, CPO prices shot up to a historical high," he said during his presentation at the International Palm Oil Trade Fair and Seminar 2010 today.

CPO futures are now traded at around RM2,950 a tonne in the next three months as long as the prices stayed above the RM2,600 support level.

"Given the current buying momentum, the price still has room to increase," he said adding that "volume is generally low, therefore there are no signs of congestion in the market."

Transgraph Consulting Pvt Ltd Chief Executive Officer Murali Krishna P.V. said CPO prices would likely be traded at RM3,300 in the next six months on higher global demand.

In his presentation, he said CPO prices uptrend was boosted by modest CPO output and soyabean oil due to adverse weather conditions and effects of the recovering global economy.

Bursa Malaysia Derivatives Bhd, Product and Market Development General Manager Jeffrey Tan Seng Hui said the exchange would introduce more future palm oil contracts.

"Introduction of more contracts will strengthen growth of Malaysia's palm oil industry," he added.