By Danni Haizal Danial Donald

KUALA LUMPUR, April 27 (Bernama) -- The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trade in a tight range next week, with a downward bias as palm oil production is set to increase.

Palm oil trader David Ng noted that the market anticipated a higher palm oil output for next week, which is in line with the market's seasonal pattern.

“Hence, we expect the CPO prices to trade between RM3,800 and RM4,000 next week,” he told Bernama.

Meanwhile, Mumbai-based Sunvin Group commodity research head Anilkumar Bagani expected the CPO futures to trend in a wider range on the back of a short covering amid sharp sell-off prices recorded earlier in the week just ended.

He anticipates that the recovery is attributed to bargain buying and better coverage attempts from key buyers such as in India and China, with some support from the strength in the soybean oil futures on the Chicago Board of Trade and crude oil futures. 

“Next week, palm oil prices are expected to trade in a wider range of RM3,770 to RM4,100,” he said.

The Malaysian Palm Oil Association (MPOA) estimates that Malaysian palm oil production to surge by 4.5 per cent, in line with UOB Kay Hian’s average estimation of five per cent.

On the export front, inspection company Intertek Testing Services (ITS) said Malaysian palm oil exports for April 1-25 increased by 1.53 per cent to 1.09 million tonnes from 1.08 million tonnes during March 1-25.

On a weekly basis, the spot month May 2024 contract fell RM125 to RM3,931 a tonne, June 2024 slipped by RM59 to RM3,922, and July 2024 decreased by RM30 to RM3,896 a tonne.

August 2024 declined by RM2 to RM3,880 a tonne, September 2024 rose RM19 to RM3,872, and October 2024 added by RM33 to RM3,875 a tonne.

The total weekly volume decreased to 386,204 lots from 481,022 lots in the previous week, while open interest fell to 245,831 contracts from 263,873 contracts a week ago.

The physical CPO price for May South dropped RM150 to RM4,000 a tonne from the previous week’s RM4,150.

-- BERNAMA