CPO Prices Expected to Strengthen, Driven by Soybean Oil Market and Global Demand

Palm Oil Magazine
CPO Prices Expected to Strengthen, Driven by Soybean Oil Market and Global Demand. Photo by: Palm Oil Magazine

PALMOILMAGAZINE, KUALA LUMPUR – Crude palm oil (CPO) futures on the Bursa Malaysia Derivatives Exchange are predicted to trend bullish in the coming week. Palm oil dealer David Ng highlighted that this outlook is supported by the recent strengthening of the soybean oil market and positive fundamentals in the palm oil sector.

“We anticipate prices to trade in the range of RM4,300 to RM4,500 per ton next week,” said David Ng, as quoted by Palmoilmagazine.com from Bernama on Monday (January 13, 2025).

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However, Jim Teh, a senior trader at Interband Group of Companies, offered a different perspective, forecasting a slight correction in CPO prices. He expects prices to move between RM4,100 and RM4,300 per ton.

Also Read: Ministry of Agriculture Issues Guidelines for Palm Oil Companies to Support Local Community Plantations

“As usual, we’ll monitor the December stock data to be released by the Malaysian Palm Oil Board (MPOB). In terms of physical demand, major buyers include China ahead of the Lunar New Year, followed by India, Pakistan, the United States, as well as countries in Europe and the Middle East,” he explained.

Weekly Price Movements

For the week, the January 2025 spot contract dropped RM13 to RM4,710 per ton. However, other contracts recorded gains:

  • February 2025 rose RM50 to RM4,561 per ton.
  • March 2025 added RM23 to RM4,391 per ton.
  • April 2025 increased RM38 to RM4,285 per ton.
  • May 2025 climbed RM48 to RM4,209 per ton.
  • June 2025 surged RM55 to RM4,167 per ton.

Trading volume jumped significantly to 444,410 lots compared to 280,197 lots in the previous week, while open interest declined to 229,080 contracts on Friday from 233,618 contracts the week prior.

The physical CPO price for January in the Southern region fell RM40 to RM4,760 per ton.

Global Demand Remains Strong

Global demand for CPO continues to show resilience, especially from key consumer nations like China and India. Supported by rising soybean oil prices and seasonal demand ahead of major celebrations, a bullish trend is expected to dominate in the upcoming week, despite potential corrections.

Traders and market participants will keep a close eye on stock data releases and developments in other vegetable oil markets as indicators of price movements. (P2)

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