Malaysia CPO futures pull back after new highs

15 January 2008 07:15  [Source: ICIS news]

SINGAPORE (ICIS news)--Crude palm oil (CPO) futures on Tuesday pulled back to Malaysian ringgit (M$) 3,367/tonne ($1,036/tonne) on Bursa Malaysia, a day after  closing at a high of M$3,414/tonne due to supply concerns on surging global demand for food and biodiesel consumption.

The CPO March delivery fell RM47/tonne to RM3,367/tonne amid profit-taking on Tuesday after closing at a high of M$3,414/tonne on Monday.

Market sentiment in Malaysia for palm oil echoed hat of global soy futures, which hit record highs after the US Department of Agriculture said that global output will fall as demand rose for animal feed, vegetable oil and biofuels.

“Corn acreage in the US went up by 20% mainly at the expense of soy acreage (-15%), for use in bioethanol,” said Chris de Lavigne, vice president of global consulting at Frost & Sullivan.

Palm oil futures have surged as there was also currently a bull run on commodities, including agriculture, as it was seen as a safe haven for investment, he added.

Meanwhile the Malaysian Palm Oil Board said on Friday that palm oil stockpiles fell 7.1% to 1.68m tonnes in December last year from November, while production fell 15.4% to 253,900 tonnes, the worst output decline in a year.

This has raised supply concern for the next three months, particularly with flash floods hitting key oil palm areas in the country. 

Since late October 2007, share prices of Malaysian plantation stocks have risen by about 30%.

Major palm oil producers in Malaysia include IOI Corp, Kuala Lumpur Kepong and Sime Darby.

($1 = M$3.25)

Bookmark Simon Robinson’s Big Biofuels Blog for some independent thinking on biofuels.

By: Jeanne Lim
+65 6780 4359

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly