Malaysian Palm Oil Futures Updates & Global Concerns
Malaysian palm oil futures surged for a second consecutive session on Monday, buoyed by the robust performance of Dalian and Chicago oils. Despite forecasts of increased output, the upward trend in prices persisted. The benchmark palm oil contract for July delivery on the BMD Exchange saw a notable increase, closing up 25 ringgit, or 0.64%, reaching 3,921 ringgit ($822.53) per metric ton.
|
CPO FUTURES PRICES IN RINGGIT |
|||||
|
Month |
Last |
Open |
Change |
High |
Low |
|
May’24 |
3967 |
3965 |
36 |
3990 |
3924 |
|
Jun’24 |
3945 |
3941 |
23 |
3976 |
3905 |
|
Jul’24 |
3921 |
3917 |
25 |
3942 |
3880 |
|
Aug’24 |
3906 |
3900 |
26 |
3916 |
3863 |
|
BY TEAM ABDUL HAMEED |
|||||
Market Sentiment and Trading Dynamics
- Production Estimates Impact Prices
However, projections from the Southern Peninsular Palm Oil Millers Association (SPPOMA) hinting at a rise in Malaysian production during the April 1-25 period tempered the price surge.
- SPPOMA Data Analysis
Data from SPPOMA revealed a 4.11% increase in palm oil output during the specified period in the world’s second-largest producer.
- Market Dynamics and Palm Oil
Palm oil prices are intricately linked to movements in related oils, given their competition for market share within the global vegetable oils sector.
- Global Consumption Trends
In India, the top buyer, Malaysian palm oil imports for the 2023/2024 marketing year are forecasted to reach around 9.2 million tons, marking a decline from the previous year’s 10 million tons.
- Impact of Crude Oil Price Trends
The weakening trend in crude oil futures diminishes palm oil’s attractiveness as a biodiesel feedstock.
- Currency Dynamics
The Malaysian ringgit, the currency of trade for palm oil, remained unchanged against the dollar.
Market Outlook and Future Projections
Market recovery continued from the recent two-month low, driven by expectations of declining palm yields due to hot weather conditions in Malaysia. However, there are speculations that production may not witness a significant increase in the coming months. This bullish sentiment was partially offset by weaker crude oil prices, with traders awaiting PMIs data from China later in the week.
Click Here To View April 25, 2024 Report
In conclusion, Malaysian palm oil market reveals a delicate interplay of domestic and global factors. As these uncertainties, a comprehensive understanding of the evolving dynamics for Palm trade in Neutral or Defensive Position due to narrow gap between rival soft edibles oils, it may hovering in the range of MYR3,850 to MYR4,150 per ton.
