Benchmark CPO Futures Contract Rallies Above RM3,800

By Nur Athirah Mohd Shaharuddin

KUALA LUMPUR, Aug 22 (Bernama) -- Crude palm oil (CPO) futures contracts on Bursa Malaysia Derivatives closed sharply higher today, with the benchmark November contract rallying above RM3,800.

Palm oil trader David Ng said the rally was driven by the slower-than-expected production of the commodity, while stronger Chicago Board of Trade (CBOT) soybean oil prices during Asian hours also helped lift market sentiment. “We see support at RM3,750 a tonne and resistance at RM3,900 a tonne,” he told Bernama. 

At the close, the benchmark CPO contract for November 2024 added RM72 to RM3,826 a tonne. 

Fastmarkets senior analyst Sathia Varqa said CPO futures ended sharply higher today, locking in the highest single-day gain in 36 days, fuelled by optimism over Malaysian CPO export demand following news of Indonesia’s planned biodiesel upgrade to B40 from the current B35.  “A higher biodiesel mandate means greater CPO feedstock to be used for producing palm methyl ester to be blended into diesel to meet the mandated B40, thus limiting global export supply from Indonesia but clearing the way for Malaysia to capture fresh opportunities,” he added. 

Today, it was reported that Indonesia plans to implement a mandatory 40 per cent blend of palm oil-based biodiesel starting from Jan 1, 2025, versus the current 35 per cent mandatory blend known as B35. 

At the close, the spot month September 2024 contract added RM40 to RM3,928 a tonne, October 2024 gained RM63 to RM3,868 and December 2024 gained RM79 to RM3,814. The January 2025 note improved by RM81 to RM3,808 a tonne and February 2025 surged RM82 to RM3,800 a tonne.

Total volume rose to 95,069 lots from Wednesday’s close of 64,853 lots, while open interest edged down to 221,143 contracts from 222,870 contracts previously. The physical CPO price for August South was up by RM10 to RM3,950 per tonne.

-- BERNAMA