30/05/2011 (The Star) - Crude palm oil futures prices on Bursa Malaysia Derivatives are likely to remain above RM3,000 per tonne this week amid strong overseas demand, according to dealers.

A dealer said demand fundamentals for palm oil remained supportive and the industry were expecting more shipments to China, India and the Middle East.

“Due to strong demand, stemming from these markets, CPO prices will remain firm, hovering between RM3,400 and RM3,480 per tonne, despite risingproduction,” he added.

Market players expect palm oil production to increase in the second half with output tipped to reach 18 million tonnes this year following two consecutive years of decline.

CIMB's Group Treasury Research said demand would continue to spiral in the weeks ahead with the Muslim fasting month less than three months away.

However, another dealer said the CPO market may see some correction with investors taking profits following the recent surge in prices.

Another dealer said market players were also awaiting the release of May's export data, due on Tuesday, for fresh market leads.

On a weekly basis, June increased RM67 to RM3,544 per tonne, July jumped RM68 to RM3,490, August gained RM48 to RM3,438 and September rose RM29 to RM3,408.

Turnover increased to 110,484 lots, from 94,638 lots, last week while open position rose to 106,927 contracts, from 105,668 contracts, previously. On the physical market, the June South ended at RM3,520 per tonne. Bernama