CPO Futures Expected to Rise Next Week Amid Geopolitical Tensions

Crude palm oil (CPO) futures on Bursa Malaysia Derivatives are expected to trade higher next week, supported by expectations of firmer crude oil prices amid ongoing geopolitical tensions. Interband Group of Companies senior palm oil trader Jim Teh said the CPO futures market was tracking movements in crude oil prices, which could rise further due to tensions in West Asia.

Teh added that CPO prices look like they are following energy prices, with crude oil potentially rising due to the West Asia tensions. Therefore, the trading range for CPO futures next week is expected to be between RM4,500 and RM4,600 per tonne.

However, Malaysia's palm oil stocks stood at 2.8 million tonnes in August, among the highest levels recorded this year, which could limit further price gains. On physical demand, Teh said purchases were expected to come mainly from India, Pakistan, China, the Middle East and the European Union, with some demand also expected from the United States.

Meanwhile, Iceberg X Sdn Bhd proprietary trader David Ng said the market was likely to trade sideways next week in the absence of clear bullish or bearish cues. He added that the lack of market catalysts was likely to keep traders cautious and limit significant price movements.