Crude palm oil at all-time high on strong demand; analysts maintain bullish outlook

The momentum indicator Relative Strength Index is at 61 which indicates bullish movement in prices.

Mumbai / May 09, 2021 / 04:50 PM IST
CPO

CPO

Crude palm oil (CPO) futures settled at a new all-time high on the MCX on firm demand for edible oil in the spot markets on the back of Ramzan buying and positive global trend.

Malaysian palm oil futures jumped 4.98 percent to settle at 4,425 Ringgits on Bursa Malaysia Bhd.

CPO delivery for May gained Rs 17.10, or 1.41 percent to settle at Rs 1,231.80 per 10 kg with a business turnover of 4,825 lots. The same for June delivery soared Rs 20.70, or 1.76 percent at Rs 1,199.40 per 10 kg with a business volume of 2,023 lots.

It ended the week with a gain of Rs 11.4 or 0.93 percent on the domestic bourse. Crude palm oil prices jumped in four out of the five trading sessions on the MCX.

MCX CPO traded higher during April month as there had been decreased buying in the domestic market for vegetable oils including mustard and refined soy oil. The appreciation in rupee against the US dollar had led to support of higher imports of vegetable oil.

Close

Sunand Subramaniam, Senior Research Associate, Choice Broking, said: “We expect MCX CPO futures to be bullish as firm demand from Europe, the US and China and rise in crude oil prices may support CPO prices in coming weeks."

According to Malaysian Palm Oil Board (MPOB) data, CPO production has been reported at 1,423,354 tonnes for March 21, higher compared to 1,108,236 tonnes reported on February 21.

Although the demand scenario is uncertain in India due to the near lockdown situation in various states, industries continue to stock in crude palm oil for future retail and cosmetic production.

Technical

The agri commodity has been trading higher than 5, 20, 50, 100 and 200 days’ simple moving averages (SMA) and exponential moving average (EMA) on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 61 which indicates bullish movement in prices.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited

Strategy: For the upcoming week, traders should keep an eye on buy in MCX Crude Palm Oil in April futures from the level at Rs 1,212-1,214. For such a position, one should keep the target around Rs 1,220 and a stop loss at Rs 1,180.

Rationale: There is plenty of demand in the world market but there is news that to control inflation, the Indian government may cut down the import duty. Also, on the higher levels, there is less demand for palm oil. The labour started to join the estate in Malaysia which will help to increase the production and drag down the price.
Sandeep Sinha

stay updated

Get Daily News on your Browser
Sections