02.10.2020 (www.theedgemarkets.com) - KUALA LUMPUR (Oct 2): Crude palm oil (CPO) futures contracts on Bursa Malaysia Derivatives closed lower today, largely influenced by the spike in COVID-19 cases globally.
Singapore-based Palm Oil Analytics’ owner and co-founder, Dr Sathia Varqa said the local sentiment mirrored the sentiment in Europe and the United States, whereby crude oil and soybean oil had also witnessed sharp declines.
“This is over fears of COVID-19 resurgence in Europe and the US, a steep drop in soybean oil on the Chicago Board of Trade, profit booking after hefty gains yesterday, and negative news afflicting the industry after the US Customs and Border Protection agency banned imports of palm oil from Malaysian company FGV Holdings Bhd,” he said.
Malaysia recorded 287 new COVID-19 cases today, the highest number of cases since the pandemic broke out early this year in the country.
An analyst said the fear of another lockdown and retrenchment exercises, which would lead to a decline in consumer purchasing power, domestic demand and global trade, pulled the CPO market lower.
“While the number of local transmissions increased tremendously, another lockdown will put jobs in the plantation industry at risk and, ultimately, put a halt on the gradual economic recovery in the third quarter,” he said.
At the close of today’s trade, the CPO futures contract for October declined RM74 to RM2,846 per tonne, while November 2020, December 2020, and January 2021 slipped RM77 to RM2,766 per tonne, RM2,708 per tonne, and RM2,674 per tonne, respectively.
Total volume narrowed to 48,215 lots from 63,825 lots yesterday, while open interest declined to 245,116 contracts from 255,747 contracts.
Meanwhile, the physical CPO price for palm oil was RM60 lower at RM2,880 per tonne for October South.