Meanwhile, the Malaysian Palm Oil Board cautioned that Indonesian producers are aggressively reducing inventory since reversing an export ban.
CPO futures to trade on downside bias this week
Crude palm oil (CPO) futures contracts on Bursa Malaysia Derivatives is expected to trade on downside bias due to weak demand, which may weigh on prices, a dealer says.
However, further losses would be capped as the current low prices would be attractive for the traditional market of India in October’s Deepavali celebration.
“This would likely help reduce our current stocks,” he told Bernama.
Echoing him, Singapore-based Palm Oil Analytics’ owner and co-founder Sathia Varqa said trading on the CPO futures market should recover this week, erasing previous losses.
“Palm fundamentals remain strong relative to other oils despite the bearish sentiment. With lower prices, wider discount, weaker ringgit and seasonal demand uptake, we should see prices recover this week,” he said.
In its research note, MIDF Research raised its 2022 growth projection for the country’s exports and imports to 22.4% and 29.5%, respectively, adding that there were signs of diversification to new markets for palm oil exports.
“We expect the relatively lower prices will limit the sector’s export growth, but possible diversification to new markets may help support palm oil exports,” it said.
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