CPO futures continue to trend lower as headwinds loom

CPO futures continue to trend lower as headwinds loom

Crude palm oil futures contracts on Bursa Malaysia Derivatives continued its downtrend to close lower today as headwinds remain following a pessimistic global economic outlook of rising inflation, soaring interest rates and the strengthening US dollar. — Picture by Mukhriz Hazim

Tuesday, 27 Sep 2022 9:48 PM MYT

KUALA LUMPUR, Sept 27 — Crude palm oil futures contracts on Bursa Malaysia Derivatives continued its downtrend to close lower today as headwinds remain following a pessimistic global economic outlook of rising inflation, soaring interest rates and the strengthening US dollar.

Singapore-based Palm Oil Analytics owner and co-founder Sathia Varqa told Bernama that CPO futures stabilised following a massive sell-off yesterday but were unable to maintain the trend at the closing.

“Palm futures recovered in the second half powered by bargain buying and from the prospects of higher exports after the ringgit hit a new 24-year low against the US dollar.

“A weaker ringgit makes the tropical oil cheaper to international buyers stoking export interest but the gains were fragile and (palm futures) ended the day marginally lower,” he said.

At the close, CPO futures contracts for the spot month of October 2022 declined RM18 to RM3,463 per tonne, November 2022 went down RM13 to RM3,503 per tonne, December 2022 erased RM18 to RM3,523 per tonne and January 2023 was RM17 weaker at RM3,558 per tonne.

February 2023 decreased RM14 to RM3,603 per tonne while March 2023 slipped RM15 to RM3640 per tonne.

Total volume shrank to 60,719 lots from 71,735 lots yesterday while open interest eased to 255,102 contracts from 271,873 contracts, previously.

Physical CPO price for October South was lower by RM50 to RM3,550 per tonne. — Bernama