KUALA LUMPUR, Nov 23 (Bernama) -- The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to see range-bound trading next week with the benchmark contract month moving between RM2,500 and RM2,600 per tonne, industry analysts said.
Interband Group of Companies senior palm oil trader Jim Teh also expected a mild technical correction next week as the prices were on the uptrend over the last three weeks.
“CPO prices have been rising in the last three weeks, so we may see a technical correction next week. Besides, the months of November and December are typically lower (in terms of production) and traders might want to square off their positions toward the end of the year,” he told Bernama.
However, he said there was some positive news that was expected to further support the commodity, including the recent announcement by the Primary Industries Minister Teresa Kok Suh Sim which has encouraged smallholders to directly sell the palm oil to the cooperatives.
"The move would definitely benefit the smallholders as they can cut off the middle-man commission, thus sell palm oil at a better price.
"Middlemen could take up to 30 to 40 per cent more profits compared to the smallholders...this has to stop. Even though CPO prices have increased, the smallholders are still making a marginal profit,” Teh added.
On a Friday-to-Friday basis, the CPO futures contract for December 2019 jumped RM122 to RM2,642 per tonne, January 2020 and March 2020 each surged RM139 to RM2,710 per tonne and RM2,760 per tonne, respectively, while February 2020 was RM141 higher at RM2,748 per tonne.
Weekly turnover widened 319,037 lots from 262,598 lots in the previous week, while open interest expanded to 285,461 contracts from 256,165 contracts previously.
On the physical market, the CPO price for November South gained RM120 to RM2,670 per tonne.