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Palm Oil Would See Technical Correction ; Trader Jim Teh Syndicates Co. Said .

KUALA LUMPUR(Bernama ): The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is likely to experience a technical correction next week following the speculative play by syndicates, Interband Group of Companies senior palm oil trader Jim Teh said.

“The syndicates are pushing up the CPO prices like nobody’s business and taking advantage, as there is plenty of palm oil in Malaysia and Indonesia every month,” he told Bernama.

Teh said prices of condensed milk had gone up badly, jumping above RM3 per can (of about 395 grammes) from RM2.60 previously.

“There is no reason for prices to be so high. Everything that goes up will have to come down so the bubble is going to burst at any time.

“CPO prices cannot always stay high because it will cause food prices to go up,” he said, adding that prices were expected to hover between RM4,500 and RM5,000 per tonne.

Meanwhile, Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa said trading next week would be centred on more crude oil production and on crude oil dynamics depending on how the Russia-United States and European Union energy sanctions would play out.

For the week just ended, CPO futures were mixed, taking cue from the movement of soybean oil on the US Chicago Board of Trade as well as developments on the Russia-Ukraine crisis.

On a Friday-to-Friday basis, March 2022 added RM900 to RM7,680 per tonne, April 2022 strengthened RM990 to RM7,580 per tonne, and May 2022 advanced RM687 to RM6,963 per tonne.

June 2022 rose RM418 to RM6,465 per tonne, July 2022 gained RM293 to RM6,168 per tonne, and August 2022 improved RM228 to RM5,962 per tonne.

Weekly volume decreased to 281,959 lots from 409,796 lots last week while open interest fell to 242,249 contracts from 336,591 contracts previously.

The physical CPO price for March South increased by RM600 to RM7,500 a tonne.

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