Higher Production, Weaker Exports Keep CPO Futures Under Pressure

By Muhammad Fawwaz Thaqif Nor Afandi

KUALA LUMPUR, Sept 18 (Bernama) -- Crude palm oil (CPO) futures on Bursa Malaysia Derivatives extended losses on Friday, closing lower amid expectations of higher production, an analyst said.

Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said recent rainfall in Kalimantan, which helped reduce some hotspots, could support palm oil production.

“Prices were also pressured by spillover weakness in energy prices, a sell-off in vegetable oil and soybean oil futures,” he told Bernama.

He added that the weaker Malaysian palm oil exports and higher production in September so far and Indonesia’s decision to keep the B50 biodiesel mandate in 2027 also dampened CPO futures prices.

Meanwhile, Iceberg X Sdn Bhd proprietary trader David Ng said market sentiment was weighed down by the weaker soy bean oil and crude oil prices.

At the time of writing, Brent crude slid 0.93 per cent to US$103.80 per barrel.

Ng added that the recent export weakness also weighed down the prices.

“We see prices supported above RM4,900 and resistance at RM5,050,” he said.

At the close, the October 2026 contract fell RM14 to RM4,698 per tonne, while the November 2026 contract declined RM32 to RM4,800 per tonne and the December 2026 contract slipped RM38 to RM4,898 per tonne.

Meanwhile, the January 2027 contract weakened by RM45 to RM4,983 per tonne, February 2027 slid RM54 to RM5,054 per tonne and March 2027 contracted RM56 to RM5,113 per tonne.

Trading volume eased to 122,261 lots from 137,371 on Thursday, while open interest declined to 339,480 contracts from 348,305 previously.

The physical CPO price for September South remained unchanged at RM4,650 per tonne.

-- BERNAMA