by SHAHEERA AZNAM SHAH / pic by BLOOMBERG
CRUDE palm oil (CPO) futures prices gained yesterday in anticipation of tight supply after monthly data released by the Malaysian Palm Oil Board (MPOB).
The benchmark CPO futures contract for December delivery on Bursa Malaysia Derivatives Exchange rose RM87 per tonne to RM2,998 yesterday as the government moved to enforce restrictions on movement to combat the Covid-19 infections in the country.
“CPO saw some profit-taking after stacking up gains supported by a strong performance on soybean oil on Dalian Commodity Exchange and Chicago Board of Trade, plus the confirmation of tighter palm oil stocks in Malaysia by MPOB,” Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa told The Malaysian Reserve (TMR) yesterday.
He added that the Conditional Movement Control Order in Sabah could impact CPO prices due to the concerns of disruption in the supply chain of the palm oil sector.
“Restrictions in the movement of activities in Sabah and parts of Malaysia will raise fear of supply disruption again as Sabah is the largest-producing state in Malaysia,” he said.
Malaysia’s CPO inventory was recorded at a tight level in September despite rising 1.24% to 1.73 million tonnes from 1.7 tonnes in August, according to the MPOB.
The stock level for the month declined 29.54% from the same month last year at 2.45 million tonnes.
The country’s production of CPO stayed flat at 1.86 million tonnes in the monthly comparison and rose 1.46% from 1.84 million tonnes from September last year, the MPOB stated. The country exported 1.61 million tonnes of CPO and processed palm oil (PPO) last month worth RM4.62 billion.
On a year-to-date basis, Malaysia has exported a combined 12.77 million tonnes of CPO and PPO worth RM34.21 billion.
Biodiesel exports amounted to 39,367 tonnes of green fuel in September worth RM140.97 million, while selling a total of 292.76 million tonnes worth RM1 billion this year.