KUALA LUMPUR, Jan 7 — The soybean market will likely disrupt crude palm oil (CPO) prices, especially during the first half of 2021, industry players said.
Godrej International Trading and Investments Pte Ltd director Dorab Mistry said although the palm oil inventory is expected to remain relatively tight until March, the soybean market seems to be in the limelight and needs to be watched closely.
“As we are expecting the world economy to do much better and move forward, production will also improve in soybean-producing countries as the demand for edible oil has held up remarkably despite the spike in Covid-19 cases,” he said at the Malaysian Palm Oil Trade Fair and Seminar 2021 (POTS Digital 2021).
The virtual event, into its third day and will end tomorrow, is organised by the Malaysian Palm Oil Council.
Mistry said the soybean market may become the price leader for a short time, while palm production would eventually recover post-Ramadhan (April) and lead the way to lower prices.
The total trading volume of six listed No. 1 soybean futures contracts on China’s Dalian Commodity Exchange today closed higher at 113,831 lots, with a turnover of about 6.64 billion yuan (RM4.1 billion), Xinhua news agency reported.
As such, Mistry anticipates lower CPO prices during the second half of the year.
At the close of trading yesterday, CPO futures contract on Bursa Malaysia Derivatives continued to rally for a third consecutive day with the benchmark March 2021 closing at a fresh high of RM3,877 per tonne: the highest level recorded since February 2011.
Meanwhile, another webinar speaker, Global Ag Protein chief executive officer Emily French said the global soy oil demand is expected to increase by three per cent this year, as the industrial demand has been a decent growth engine in overall volume.
However, she said the push for the market also depends on Brazil’s biodiesel programme and transition in the United States political administration that is hoped to bring more friendly policies for green fuel. — Bernama
