KUALA LUMPUR: High palm oil inventories in Malaysia and Indonesia will continue to put price pressure on the crude palm oil (CPO) futures on Bursa Malaysia Derivatives next week.
Interband Group of Companies senior palm oil trader Jim Teh said demand for the commodity is very low due to palm oil producers' significant CPO stocks.
"Malaysia's (palm oil) stocks stood at around 2.4 million metric tonnes (as at end-October) while Indonesia's stood at around five million metric tonnes, and the CPO stock surplus is pressuring prices," he told Bernama.
He added that the support level for CPO is at RM3,500 per tonne while resistance is at RM3,600 per tonne.
On the anticipated increase in China's palm oil imports, he said the news' impact is primarily neutral due to the excess in inventories.
For the week just ended, the local CPO market traded mixed in tandem with the regional commodity market, soybean oil prices on the Chicago Board of Trade, and fluctuations in crude oil prices.
On a weekly basis, December 2023 was down RM27 to RM3,782 per tonne, while January 2024 and February 2024 both erased RM41 each to RM3,850 per tonne and RM3,909 per tonne, respectively.
March 2024 slipped RM39 to RM3,909 per tonne, April 2024 fell RM40 to RM3,905 per tonne, and May 2024 dropped RM44 to RM3,883 per tonne.
Total weekly volume narrowed to 199,846 contracts from 275,274 lots in the preceding week while open interest improved to 211,241 from 210,160 contracts previously.
The physical CPO price for December South edged down to RM3,800 per tonne on Friday from RM3,820 per tonne a week earlier.