KUALA LUMPUR, Sept 28 — The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives ended mostly higher today, driven by the impending rainy season which will lead to lower production.
An analyst said the upcoming La Nina phenomenon, which usually takes place from October to November, would cause the crop to be minimally harvested due to climate constraints.
“Combined with rising concern over the Covid-19 cases in Sabah, which accounts for 25 per cent of total palm oil production, we foresee that the price will continue to trend up on a cautious note,” she said.
Meanwhile, palm oil trader David Ng said the Targeted Enhanced Movement Control Order (TEMCO) in Sabah was feared to leave an impact on the palm oil plantation output in the state.
“Concerns over a lockdown around plantation estates in Sabah will affect output which may draw down stocks in the country.
“However, prices are on the upward trend due to existing demand. We locate the support level at RM2,800 and resistance level at RM2,960,” he said.
Sabah today recorded 98 new Covid-19 cases and the government is imposing TEMCO in Lahad Datu, Tawau, Kunak and Semporna from midnight tonight until Oct 12, involving 962,661 residents.
At the close, spot month October 2020 rose RM20 to RM2,950 per tonne, November 2020 decreased RM7 to RM2,862 per tonne, December 2020 stayed flat at RM2,822 per tonne, and January 2021 was up RM3 to RM2,792 per tonne.
Total volume narrowed to 59,552 lots from 62,668 lots last Friday, while open interest also declined to 249,444 contracts from 253,795.
On the physical market, October South rose RM10 to RM2,950 per tonne. — Bernama