By Lizawati Bahanan
KUALA LUMPUR, Dec 3 -- The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives ended higher today in line with the uptrend in physical price which has reached an eight-year high.
The Malaysian Palm Oil Board said the higher price was also supported by expectations of a steep decline in November CPO production amid higher soya bean oil prices on the US Chicago Board of Trade (CBOT) and China's Dalian Commodity Exchange.
In addition, palm oil trader David Ng said the price swung from negative territory to positive as Indonesia sought to impose a higher levy on CPO starting mid-December, making Malaysia’s CPO more attractive.
"We locate support at RM3,280 and resistance at RM3,400," he told Bernama.
Meanwhile, the Council of Palm Oil Producing Countries (CPOPC) said in its note that as of November 2020, palm oil futures on Bursa Malaysia Derivatives Market was trading above RM3,000 per tonne.
"If it continues for the rest of the year, palm oil prices would probably average at around RM2,600 to RM2,650, a return to the more optimistic prices back in 2017," it said.
On account of tighter supply-demand dynamics and low palm oil stocks, the CPOPC sees the momentum continuing until a higher production resumes in the second half of 2021.
At the close, the CPO futures contract for December 2020 and January 2021 increased RM27 to RM3,504 per tonne and RM3,411 per tonne respectively, February 2021 rose RM16 to RM3,32 per tonne and March 2021 lifted RM8 to RM3,245 per tonne.
Total volume rose to 73,164 lots from 47,138 lots on Wednesday, while open interest slipped to 255,062 contracts from 225,369 contracts previously.
The physical CPO price for December South added RM10 to RM3,540 per tonne.
-- BERNAMA