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Crude palm oil (CPO) futures traded on Bursa Malaysia Derivatives are projected to trend higher in the coming week, buoyed by expectations of firmer crude oil prices amid escalating geopolitical tensions in West Asia.
Jim Teh, Senior Palm Oil Trader at the Interband Group of Companies, told Bernama that the CPO market is closely tracking the energy complex, particularly crude oil, which he believes could climb further on the back of regional instability. '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,' he said.
However, Teh cautioned that domestic stockpiles could cap any meaningful upside. Malaysia's palm oil inventories stood at 2.8 million tonnes in August, among the highest levels recorded so far this year. On the demand side, he identified India, Pakistan, China, the Middle East, and the European Union as the principal buyers, with additional orders likely from the United States.
David Ng, Proprietary Trader at Iceberg X Sdn Bhd, offered a more measured outlook, anticipating sideways trading in the absence of a clear directional catalyst. 'We expect prices next week to trade between RM4,850 and RM5,000,' he said, noting that the lack of decisive market cues would keep participants cautious and restrict significant price swings.
On a Friday-to-Friday basis, the front-month October 2026 contract added RM28 to settle at RM4,698 per tonne, while November slipped RM14 to RM4,800 and December fell RM46 to RM4,898. Further along the curve, January 2027 lost RM73 to RM4,983, February dropped RM94 to RM5,054, and March was last quoted at RM5,113.
Market activity cooled notably, with weekly trading volume contracting to 561,289 lots from 875,237 lots in the previous week. Open interest also eased to 339,480 contracts, down from 349,906 contracts.
In the physical market, the September South CPO price climbed RM30 to RM4,650 per tonne.
Bursa Malaysia and its subsidiaries were closed on Wednesday in observance of Malaysia Day.
Source: Bernama