Business Times

Thursday - March 27, 2008

CPO FUTURES

Crude palm oil (CPO) futures prices on Bursa Malaysia Derivatives closed sharply higher yesterday, riding on the bullish soyoil prices following tight global supplies, said dealers.

The benchmark third-month June 2008 contract surged RM200 to RM3,700 per tonne from RM3,500 per tonne on Tuesday, they said.

“Investors are spurred towards buying palm oil due. Many are turning to this alternative as soyoil supplies becomes limited, also attributed by the crisis in Argentina, the world’s number three exporter of soy,” one dealer said.

A strike by farmers in Argentina has already triggered a force majeure - a contract clause allowing a supplier to forego their obligation in extreme unforeseen circumstances - in soy and soyoil shipments to China.

Indonesia is also slated to double its CPO export taxes to 20 percent in April, and this would benefit the local palm oil market as it would see a heavier reliance on Malaysian palm oil to feed global demand.

At close yesterday, April 2008 futures rose RM190 to RM3,650 from RM3,460 per tonne previously and May 2008 increased RM201 to RM3,701 from RM3,500 per tonne. July 2008 increased RM199 to RM3,699 from RM3,500 per tonne.

The day’s volume stood at 21,920 lots compared with 20,170 lots on Tuesday.

Open interest rose to 40,655 contracts from 40,489 contracts previously.

On the physical market, April South was higher at RM3,650 per tonne from RM3,510 per tonne on Tuesday.

Share The Story :

This entry was posted on Friday, March 28th, 2008 at 6:11 pm and is filed under The Business Times - Commodity Roundup. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.