Business Times Palm futures extend uptrend on weak stockpile

CPO FUTURES

Crude palm oil (CPO) futures prices on Bursa Malaysia Derivatives ended mostly higher yesterday, extending its uptrend on weak stockpile.

OSK Research in its note said the decline in the palm oil inventory last month has helped drive palm oil prices higher rather than strong demand.

It said Malaysia's inventory fell by 12.7 per cent to 1.364 million tonnes, its lowest since July 2007 as production was still low in absolute terms.

However, it is still maintaining a cautious outlook premised on strong production recovery in the second half of the year.

"Hence, should production recover, inventory will again start to go up if the rise is not matched by an increase in exports," OSK added.

At the close of trading yesterday, the CPO futures contracts for April 2009 jumped RM38 to RM2,455 per tonne, May 2009 dipped RM12 to RM2,418 per tonne, June 2009 went up RM36 to RM2,335 per tonne and July 2009 added RM41 to RM2,290 per tonne.

The day's volume amounted to 14,825 lots, down from last Friday's 10,824 lots, while open interests slide to 85,966 contracts from 86,545 previously.

As for the physical market, the CPO for April shipments in the southern region was higher at RM2,480 per tonne compared to last Friday's RM2,430 per tonne.