Crude palm oil futures traded steady at Rs 804.20 per 10 kg on October 23 as participants trimmed their long positions. Malaysian palm oil futures declined 0.81 percent to 2,990 ringgit on Bursa Malaysia Bhd.
Prices rallied in the last few days on expectation of lower output from Malaysia and strong export demand.
Heavy rains in Malaysia and Indonesia due to La Nina effect is positive news for the short term due to supply disruption, but is likely to turn bearish in the long run as production is likely to increase significantly in coming quarters due to a bountiful rainfall this time around.
In the futures market, crude palm oil (CPO) for October delivery touched an intraday high of Rs 806 and a low of Rs 799.10 per 10 kg on the Multi-Commodity Exchange (MCX). So far in the current series, CPO has touched a low of Rs 710.40 and a high of Rs 818.50.
CPO futures for October delivery fell Rs 0.2, or 0.02 percent, to Rs 804.2 per 10 kg at 14:52 hours IST on a business turnover of 1,780 lots. The same for November delivery slipped Rs 3, or 0.37 percent, to 798.30 per 10 kg on a business volume of 4,308 lots.
The value of October and November’s contracts traded so far is Rs 41.62 crore and Rs 96.50 crore, respectively.
“India is expected to continue to buy more palm oil ahead of the festive season. Hence, we expect the gains to continue in CPO in the coming session,” said Kotak Securities.
As of October 22, MCX CPO was trading at a discount of Rs 11 from import cost at Kandla Port.