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Palm Oil Trading May Recover Slightly Today

KUALA LUMPUR: Crude Palm Oil (CPO) futures contracts on Bursa Malaysia Derivatives may see some trading recovery this week amid the current attractive price levels.

As we say in our article on 17/9/22 Click Here..

However, Singapore-based Palm Oil Analytics’ owner and co-founder Sathia Varqa said the recovery may not be sustainable as investors are awaiting the Sept 1-Sept 20 production numbers to be released during the week.

‘’Better Sept 1-Sept 20 production figures will trigger selling pressure,’’  adding that bullish exports expectation for the month does not appear to be enough to fuel interest.

While Planters’ sustainability efforts towards producing certified sustainable palm oil (CSPO) are being paid-off slowly following increasing supply and demand for the commodity, says UOB Kay Hian (UOBKH) Research.

The global awareness on the CSPO sustainable supply chain has also benefited some CSPO producers with price premiums ranging between 3% and 10% above the current crude palm oil (CPO) prices.

These findings are based on the recent dialogue session between UOBKH Research and the Roundtable on Sustainable Palm Oil (RSPO) CEO Joseph D’Cruz.

It noted that more RSPO-certified palm oil are in the pipeline. According to RSPO, the CSPO production increased by 5.7% year-on-year (y-o-y) to 14.7 million tonnes in 2021, representing 19% of the global CPO production.

“If all RSPO grower members’ palm oil production is 100% RSPO-certified, the estimated total CSPO would represent about 41% of total global production,” it added.

Alongside the increased awareness on supply chain sustainability, the demand for CSPO had increased over the years with CSPO consumption representing almost 12% of global palm oil consumption.

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