BMD Crude Palm Oil Futures Market Overviews

Crude Palm Oil Ends Up On Higher Exports, Lower Output
Crude palm oil futures on Malaysia’s derivatives exchange ended up Monday due to higher exports and a likely decline in production, trade participants said.

The benchmark April CPO contract on the Bursa Malaysia Derivatives ended MYR14 higher at MYR2,469 a metric ton, after trading in a range of MYR2,460-MYR2,488.

Malaysia's palm oil exports during Jan. 1-25 were estimated to be higher than during the same period last month. Cargo surveyor Intertek Agri Services estimated exports at 1.21 million tons, up 21%. Cargo surveyor SGS (Malaysia) Bhd. also estimated exports at 1.21 million tons.

Both estimates were above market expectations of an 18% gain to 1.18 million tons.

The increase in exports comes as production is expected to fall.

The Malaysian Palm Oil Association said palm oil production in January dropped 14% from the previous month, with output in the key oil-palm-producing state of Sabah registering a sharp fall of 17%.

"With exports on the rise and production on the decline, we should see a draw-down in stocks. CPO prices may be able to return to MYR2,500 levels," a Kuala Lumpur-based trader said.