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BMD CPO Futures Extend Losses As Supply Outstrips Demand

14 Sep 2018 4:08 pm
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Mumbai (Commoditiescontrol) - Malaysian palm oil futures settled lower on Friday as supply is overpowering demand.

Malaysian Palm Oil Board (MPOB) has estimated Malaysian palm oil stocks for August 2018 at 7-month high of 2.49 million tons, higher by 12.4 percent.

The palm oil production for August month estimated at 1.62 Million tons, 7.9 percent up from July 2018.

While, Malaysian palm oil exports are pegged at 1,099,583 Tons, 8.1 percent down from July.

Meanwhile, according to market talks, palm oil export for 1-15 period for September is likely to remain 84-86.2% higher as compared to August.

According to market sources, Cargo surveyor Intertek Testing Services (ITS) is estimating Malaysian palm oil exports for September 1-15 period 86.2% up at 424,487 MT versus 366,055 in August. While, AmSpec Agri Malaysia is also expecting 84% rise in Exports for September 1-15 period at 764,000 MT versus 415,000 MT of Aug 1-15 period.

“The demand is looking good as the major importing countries like India has not bought much in first 3 weeks of August, so the percentage figures are on substantially higher range, but on an average the supply is exceeding demand and end stocks are likely to be at 7-month high”, a Singapore based trader says.

Crude palm oil most active November contract on BMD settled at MYR2222/Ton, down by 21 Ringgits or 0.94%.

The BMD CPO Index (average of all traded contracts) stood at MYR2282/Ton, MYR18 down.

The total volume registered at 59448 lots (25 ton each), while the total open interest seen at 289004 contracts up by 24248 contracts from previous open positions.

The increase in open interest along with the declining prices indicating that short positions have built up and price are likely to fall further.

In other related markets, DCE RBD Palm olein January 2019 futures settled CNY 34 down at CNY4858/Ton, while at APEX, Nov 2018 Delivery traded at USD561.5, down by USD 3.75 per Ton.

(By Commoditiescontrol Bureau)  


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