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BMD CPO Tumbles 5.6% For The Week On Rising Demand Concerns; Investors Eye Supply-Demand Data

3 Apr 2020 5:19 pm
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Mumbai (Commodities Control) – BMD CPO settles lower on Friday and marks nearly 6% negative weekly closing, logging worst drop in three weeks as worldwide coronavirus cases cross 1 millon mark.

Demand concerns rise with coronavirus cases surpassing one million amid nationwide lockdowns.

Benchmark BMD palm oil contract for June delivery closed 66 ringgit or 2.9% lower to 2,245 ringgit after trading within a range of Ringgit 2242 and Ringgit 2323/Tonne. While the volume stood at 59180.

Meanwhile, Dalian's most-active soyoil contract gained 0.34%, while its palm oil contract fell 1.44%. Soyoil prices on the Chicago Board of Trade were up 0.27%.

Surprisingly enough, palm oil ignored bounce back in crude oil prices as, Investors awaited indications for March supply and demand ahead of the official numbers due on April 10.

Crude oil futures surged 10% on Friday on hopes of a huge global supply cut deal to support prices. Stronger crude oil futures makes palm a more attractive option for biodiesel feedstock.

Malaysia's end-March palm oil stocks likely rose 1% from the month before to 1.67 million tonnes, according to forecasts from CGS-CIMB Research.

Meanwhile, Indonesia imposed safety protocols at plantations to prevent the spread of coronavirus among workers but has no plans to reduce workers' hours or other activities, the Indonesia Palm Oil Association said on Friday.

In Malaysia, the country's palm oil association warned that a long-running labour shortage in plantations could get worse as many Indonesian migrant workers have returned home amid coronavirus curbs.

Experts are of the view that Crude palm oil prices will need to fall further in order to regain the discount to soybean oil in the physical market.

(Commodities Control Bureau)

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