CPO futures close lower on higher stockpile

CPO futures close lower on higher stockpile
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KUALA LUMPUR (Sept 10): The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives retreated to end lower today as higher stocks level put pressure on prices.

Palm oil trader David Ng said the Malaysian Palm Oil Board (MPOB) reported higher production and stock level, which triggered negative sentiment in the market.

“Higher production and weak export is seen as the reason for the higher stocks,” he told Bernama.

Earlier today, MPOB released its monthly palm oil data that showed CPO stocks for August 2021 rising by 35.07% to 950,711 tonnes from the 703,881 tonnes recorded in the previous month.

Processed palm oil inventory rose 16.59% month-on-month (m-o-m) to 924,035 tonnes from 792,582 tonnes, the agency said.

Overall, palm oil stocks grew 25.28% to 1.87 million tonnes from 1.49 million tonnes previously.

On production, MPOB said CPO output increased by 11.8% to 1.70 million tonnes against 1.52 million tonnes in July, while palm oil exports eased 17.06% m-o-m to 1.16 million tonnes in August from 1.40 million tonnes in July.

At the close, the CPO futures contract for September 2021 fell RM76 to RM4,574 a tonne, October 2021 dipped RM105 to RM4,413 a tonne, and November 2021 and December 2021 eased RM114 each to RM4,278 a tonne and RM4,184 a tonne, respectively.

Meanwhile, January 2022 and February 2022 declined RM110 each to RM4,109 a tonne and RM4,031 a tonne, respectively.

Total volume expanded to 64,703 lots from Thursday’s 50,321 lots while open interest rose to 254,743 contracts from 241,152 contracts previously.     

The physical CPO price for September South decreased by RM80 to RM4,600 a tonne from RM4,680 a tonne on Thursday.