CPO Futures Hit Two-Year High On Bullish Sentiment, Strong Exports

By Fatin Umairah Abdul Hamid

KUALA LUMPUR, Oct 29 (Bernama) -- Crude palm oil (CPO) futures on Bursa Malaysia Derivatives closed higher on Tuesday, reaching a two-year high, said Fastmarket Palm Oil Analytics senior analyst Sathia Varqa.

This increase was fuelled by bullish market sentiment, strong exports, and a flat production outlook for October, he said, adding that official data from the Malaysian Palm Oil Board (MPOB) is scheduled for release on November 11.

Sathia also said that the price surge reflects positive fundamentals, with Malaysia’s CPO exports seeing robust demand this month.

From October 1-25, CPO prices rose by 10-11 per cent, compared to the same timeframe in September, indicating continued export strength.

“Meanwhile, production is expected to be unchanged particularly from the peninsular of Malaysia following cyclical low output.

“Palm futures maintained their sharp rise despite mixed closes in related vegetable oils on the Dalian and Zhengzhou exchanges,” he told Bernama.

Sathia said that speculation regarding a potential revival of the Chinese economy could also bolster prices, especially with market talk of fresh fiscal stimulus from China.

“Any policies aimed at economic recovery will be crucial for the sector as China is one of the top three export markets for palm oil from Malaysia and Indonesia,” he added.

Meanwhile, palm oil trader David Ng said CPO futures today closed higher due to expectations of weak output in the coming weeks and the anticipation of lower stock levels in the country, which supports price sentiment in the near term.

“We see support at RM4,580 a tonne and resistance at RM4,700 a tonne,” he said.

At the close, the spot month November 2024 and December 2024 contracts gained RM106 to RM4,737 and RM4,682 per tonne, respectively, with January 2025 increasing by RM108 to RM4,637 per tonne.

The February 2025 note was up by RM103 to RM4,573 per tonne, March 2025 added RM87 to RM4,493, and April 2025 was RM75 higher to RM4,410.

Trading volume increased to 89,447 lots from 60,668 on Monday, while open interest rose to 250,424 contracts from 248,979 previously.

The physical CPO price for November South was RM80 higher at RM4,760 per tonne.

-- BERNAMA