28.12.2019 (The Star Online) - KUALA LUMPUR: Crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to remain above RM3,000 per tonne in the upcoming shortened trading week, following improvement in exports and concerns on tight supply.

Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa said the market will wrap up the year assessing the lower December output.

"The repeated announcement on biodiesel mandates in Indonesia and Malaysia also will reinforce the bullish sentiment that is already pervasive in the market, ” he told Bernama.

Sathia said the rise in prices of soybean oil and palm olein are further boosting palm oil prices.

"Additionally, the stronger ringgit made the tropical vegetable oil expensive for international buyers, dampening export demand, ” he said, adding that CPO prices are expected to range between RM3,000 and RM3,075 per tonne.

According to the Malaysian Palm Oil Association (MPOA) report, Peninsular Malaysia's CPO production for December decreased by about 20 per cent compared with November, while Sabah and Sarawak's output fell by 10.86 per cent and 7.36 per cent, respectively.

Meanwhile, data from independent inspection company, AmSpec Agri Malaysia, showed that exports for Dec 1-25 dropped 9.6 per cent to 1.07 million tonnes from 1.18 million tonnes in the same period last month.

CPO futures rose above RM3,000 yesterday - the highest in three years, buoyed by a lower December output entailing tighter year-end stocks.

On a Friday-to-Friday basis, the CPO futures contract for January 2020 rose RM138 to RM3,035 per tonne, February 2020 expanded RM162 to RM3,077, March 2020 gained RM161 to RM3,073 per tonne and April 2020 added RM165 to RM3,057.

Weekly turnover declined to 114,891 lots from last Friday's 263,142 lots while open interest fell to 272,739 contracts versus 277,451 contracts.

On the physical market, the CPO price for December South gained RM90 to RM3,040 per tonne. – Bernama