CPO futures closes lower

by **Cals** Tue 11 Mar 2014, 22:42

Business & Markets 2014

Written by Bernama

Tuesday, 11 March 2014 19:44

KUALA LUMPUR (March 11): Crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives closed lower today, on concerns over tight supply amid prolonged dry weather, said a dealer.

Phillip Futures Sdn Bhd Investment Analyst, David Ng, said the current dryness might hurt long-term production potentials, and expects CPO prices to move towards the 2,945-2,970 levels, in near-term.

CPO production declined for the fourth consecutive month in February, falling 15.3 per cent month-on-month and 1.5 per cent year-on-year, to 1.28 million metric tonne.

The weak production was mainly attributable to the lower production from the East Coast region of Peninsular Malaysia, due to the dry spell, said MIDF Research, in a note today.

In 2013, CPO production from the East Coast region contributed about 19.4 per cent of the total CPO production in Malaysia.

"The decline in inventory, amid the current dry weather conditions, has raised concerns on CPO supply in the next couple of months, and drove CPO price higher," it added.

Palm oil inventory in February, declined 14.2 per cent to 1.65 million metric tonne, from 1.94 million metric tonne, a month earlier.

March 2014 added RM8 to RM2,912 a tonne, but April 2014 eased RM11 to RM2,892 a tonne, May 2014 fell RM29 to RM2,872 a tonne, and June 2014 declined RM32 to RM2,853 a tonne.

Turnover jumped to 51,903 lots from Monday's 31,185 lots, and open interest was higher at 226,156 contracts, from 208,184 contracts yesterday.

On the physical market, March South added RM10 to RM2,940 a tonne.