KUALA LUMPUR (June 20): The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives extended last week’s downtrend to closed lower on Monday (June 20), the lowest since Jan 17, weighed by weak market fundamentals.
Singapore-based Palm Oil Analytics’ owner and co-founder Sathia Varqa said the palm oil market was influenced by the weaker soya bean oil performance, dropping substantially in anticipation of improved supply.
He said the bearish CPO export data for the first 20 days of the month also weighed on sentiment on Monday.
“The market is going into a high production season in Malaysia, which is relatively higher during August, September and October.
“These several weak fundamentals had caused prices to drop to a five-month low,” he told Bernama.
According to cargo surveyor Amspec Agri, exports of Malaysian palm oil products for June 1-20 fell 16.96% to 659,768 tonnes, from 794,527 tonnes shipped during May 1-20.
Meanwhile, Intertek Testing Services (ITS) said exports for the same period decreased 10.46% month-on-month to 738,368 tonnes.
At the close, the CPO futures contract for spot month July 2022 fell RM418 to RM5,261 a tonne, August 2022 decreased RM464 to RM5,060 a tonne, and September 2022 contracted RM473 to RM4,981 a tonne, while October 2022 lost RM474 to RM4,955 a tonne.
Total volume increased to 94,727 lots from 79,013 lots on Friday (June 17), while open interest widened to 310,748 contracts from 298,491 contracts previously.
The physical CPO price for June South was down RM400 to RM5,450 a tonne.