CPO Futures Extend Downtrend On Weaker Demand

By Rosemarie Khoo Mohd Sani

KUALA LUMPUR, Jan 15 (Bernama) -- Crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives extended its downtrend today on weaker demand from key market destinations, namely India, China and the European Union. 

Mumbai-based Sunvin Group commodity research head Anilkumar Bagani told Bernama that additionally, an estimated drop in Malaysian palm oil export of more than 20 per cent during the first half of this month also put pressure on palm oil prices. 

However, he noted that according to Malaysian Palm Oil Board (MPOB) director-general Datuk Dr Ahmad Parveez Ghulam Kadir, Malaysia’s palm oil exports are expected to grow by 2.4 per cent to 17.3 million tonnes in 2025, generating RM120 billion in revenue -- a 9.8 per cent increase from 2024.

Crude palm oil (CPO) production is projected to edge up by 0.3 per cent to 19.5 million tonnes, while palm oil stocks may decrease by 6.4 per cent to 1.6 million tonnes.

MPOB forecast CPO prices to average between RM4,000 and RM4,300 per tonne in 2025, driven by tighter global supplies. 

 This is partly due to Indonesia’s B40 biodiesel mandate and increased US demand for biodiesel, reducing the global exportable supply of palm oil.

Meanwhile, palm oil trader David Ng said CPO prices closed easier amid concern over a weaker export pace, as indicated by cargo surveyors.

The lower Dalian Commodity Exchange palm olein prices also contribute to the price decline.

“We see support at RM4,280 per tonne and resistance at RM4,400 per tonne,” Ng said. 

Separately, RHB Investment Bank Bhd, in a research note, said CPO prices are expected to remain elevated in the first half of 2025, trading between RM4,400 and RM4,800 per tonne, before moderating in the second half to RM4,000-RM4,400 per tonne during the seasonal peak.

This is attributed to the low output and stock levels in Indonesia in 2024, the rise in biodiesel mandates in Indonesia for 2025, and tighter supplies of sunflower and rapeseed oil in 2025.

At the close, the January 2025 contract gained RM7 to RM4,675 per tonne, but the February 2025 contract fell by RM66 to RM4,578 per tonne, and the March 2025 contract declined RM70 to RM4,367 per tonne.

April 2025 slid RM69 to RM4,268 per tonne, May 2025 erased RM76 to RM4,186 per tonne, and June 2025 lost RM43 to RM4,136 per tonne.

Trading volume widened to 101,035 lots from 80,099 lots on Tuesday, while open interest increased to 222,977 contracts from 221,897 contracts previously.

The physical CPO price for January South shed RM40 to RM4,760 per tonne.

-- BERNAMA