By Durratul Ain Ahmad Fuad
KUALA LUMPUR, Oct 10 (Bernama) -- Crude palm oil (CPO) futures on Bursa Malaysia Derivatives continued their downtrend today to close mostly lower for the third consecutive day amid signs of higher stock levels in the country following the Malaysian Palm Oil Board’s (MPOB) September 2024 data release, a trader said.
Palm oil trader David Ng said palm oil stocks rose nearly seven per cent month-on-month in September, driven by a weaker-than-expected export pace that contributed to the overall increase in inventory in the country.
“Stocks in September increased owing to a weaker-than-expected export pace. This trend is likely to put pressure on prices in the future,” he told Bernama.
According to MPOB, palm oil exports in September 2024 edged up 0.93 per cent to 1.54 million tonnes from 1.53 million tonnes in August 2024, while total palm oil stocks climbed 6.93 per cent to 2.01 million tonnes from 1.88 million tonnes in the preceding month.
In contrast, CPO production dropped 3.8 per cent, or 71,926 tonnes, to 1.82 million tonnes in September 2024 from 1.89 million tonnes in August.
Ng said the weakness in soybean oil prices also weighed on the sentiment.
“We see support at RM4,200 (per tonne) and resistance at RM4,350,” he added.
Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said Malaysia’s palm oil stocks for September at 2.01 million tonnes is within the group’s estimate of 2.04 million tonnes and higher from other estimates of 1.88 million-1.95 million tonnes.
However, it was down year-on-year from 2.312 million tonnes in September 2023.
“The rise in end stocks was mainly attributed to the sharp 37 per cent decline in domestic consumption and more than a 10 per cent rise in CPO stocks,” he said.
He noted that production dropped by 3.8 per cent while exports rose by just under one per cent.
“The data is slightly bearish for palm oil but other factors are also need to considered.
“The October palm oil export is expected to show some strength, while there’s no clarity over production yet. Additionally, the dry weather in South America is supporting the bullish momentum in global vegetable oil markets,” he added.
At the close, November 2024 contract fell RM24 to RM4,269, December 2024 lost RM19 to RM4,233, January 2025 dropped RM13 to RM4,196, and February 2025 slid RM4 to RM4,167.
However, the spot month October 2024 contract added RM7 to RM4,350 per tonne, and March 2025 added RM4 to RM4,139.
Trading volume rose to 108,838 lots from 90,582 yesterday, while open interest strengthened to 251,551 contracts from 248,042 previously.
The physical CPO price for October South remained unchanged at RM4,400 per tonne.
-- BERNAMA
