By Sharifah Pirdaus Syed Ali

KUALA LUMPUR, May 14 (Bernama) -- The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trade with an upside bias next week on the expectation of stronger exports.

Palm oil trader David Ng said the uncertainty surrounding the Indonesia edible oil export ban will continue to support the demand for Malaysian palm oil.

A lack of clarity on when Indonesia's edible oil export ban would be lifted has prompted an increasing demand for Malaysian palm oil, especially from top buyers India and China, he noted.

“Indian reserves are dwindling and as the world’s number one importer of vegetable oils, Malaysia is seen, as a more reliable supplier,” he told Bernama. “Chinese purchases could also recover after the nation’s lockdowns to curb the spread of COVID-19 are relaxed. Therefore, we reckon the commodity will trade on the upside between RM6,200 and RM6,700 next week.”

Singapore-based Palm Oil Analytics’ owner and co-founder Sathia Varqa said bargain hunting and the prospect of strong exports would support the market but the gains are seen as fragile with bearish factors lingering in the market. “With a four-day trading next week in Malaysia, the market will see another highly volatile week with all eyes on Indonesia’s export ban changes,” he added.

The market will be closed on Monday for the Wesak Day celebration.

For the week just ended, Malaysia’s CPO futures were traded mixed, mainly taking the cue from the movement of rival vegetable oil futures as well as the Malaysian Palm Oil Board (MPOB) report on output and inventory as well as export data.

On a Friday-to-Friday basis, May 2022 decreased RM108 to RM6,950 a tonne, June 2022 fell RM103 to RM6,682 a tonne, and July 2022 dipped RM31 to RM6,369 a tonne.

Meanwhile, August 2022 was RM15 lower at RM6,139 a tonne, September 2022 reduced RM13 to RM6,020 a tonne, and October 2022 eased RM4 to RM5,970 a tonne.

Weekly volume surged to 263,529 lots from 121,996 lots last week, while open interest was slightly lower at 203,624 contracts compared with 209,809 contracts previously.

The physical CPO price for May South fell RM270 to RM6,900 a tonne.

-- BERNAMA