Malaysia CPKO: Local offers fall further amid slowing demand, rising supply expectation
Domestic CPKO offers in Malaysia fell for the third consecutive week in the week ending April 26, with a 20-ringgit drop, the largest weekly change seen since June 2022. Weekly average offers fell to 306.40 ringgit per picul (5066 ringgit per tonne) from 326.40 ringgit per picul the previous week, with offers falling below 300 ringgit for the first time since 14 March. The drop in local CPKO mirrored the wider fall in palm oil complex cash prices, with the weekly average offers for local CPO also falling by 172 ringgit per tonne from a week ago, on expectations of rising output and slower demand rise. Market participants are anticipating Malaysia’s production to come flat to 5% higher from March, with production ham-pered by the Eid festive holidays but showing an overall improvement due to higher labour productivity. This would place CPO output at about 1.4-1.46 million tonnes and translate to around 168,000-174,000 tonnes of CPKO. CPKO production in March was reported at 166,508 tonnes, according to estimates from the Malaysian Palm Oil Board (MPOB). The official supply and demand estimates for April from MPOB is due on May 10. Meanwhile, Malaysian CPKO exports for the period April 1-25 were estimated at 19,275 tonnes, a 11.3% drop from the 21,740 tonnes shipped in the same period a month before according to cargo surveyor ITS, with the volumes exported to Kenya, the EU and India. Processed PKO exports were relatively unchanged at 24,650 tonnes compared with 24,720 tonnes the month before. (1 tonne = 16.5346 picul).
CPKO cif Rotterdam: Trading activity rebounds following drop in offers
CPKO trading to Rotterdam was more active in the week ending April 26, as a drop in offers encouraged buying after two weeks of absent trade. Offers fell by $15-80 per tonne across the shipment months, with offers for May to October flat at $1,200 per tonne. Trades were reported for from June to De-cember delivery with Jun-July being actively traded at various levels. The traded levels were similar to that seen in late March, and implies some cor-rection in prices as expectations of improving supply as production rebound from its seasonally low period, though the CIF levels are still receiving some support from freight rates, with freight for 40,000 tonne-vessels carrying palm oil from southeast Asia to Rotterdam remaining above $100 per tonne since early February – Fastmarkets’ assess-ments from ongoing geopolitical tensions in the Red Sea. The increase in trades also comes as the spread between CCNO to CPKO Rotterdam widened further for a fourth consecutive week, with weekly average CPKO offers for May-June loading at a $177 discount against CCNO, sustaining CPKO buying interest against CCNO from the oleochemicals sector. The drop in CPKO offers was also reflective of movements seen at origination where local CPKO prices in Malaysia fell amid overall weakness in the palm complex. For the period April 1-25, CPKO exports to the EU was at 12,375 tonnes, an increase from the 9,440 tonnes shipped in the same period a month ago, with the entire volume destined to the Netherlands— ITS data.
CCNO: Offers down for the second week
Offers continued to climb down for the second consecutive week erasing by slightly higher margin of $15-25 versus $10-15 a week ago. Offers remain flat but inched below the support level of $1400 per tonne for the first time in five week. May to Oct offers were flat at $1390 per tonne and could see further falls on lack of supportive trading activities to sustain the offer val-ues and from sluggish palm and laurics pricing. Laurics CPKO witnessed active trading last week with eight deals heard concluded after offer prices moved lower for the third straight week and down by a large pace. Overall CCNO weekly average descended $12, the largest pace of fall in 20 weeks to settle at $1407 per-tonne having seen offers ranging from high of $1420 per tonne down to low of $1390 per-tonne at the close of the week. As cocoa prices hit record high this year from weather induced supply disruption, confectionaries likely to have shifted to securing PKO and CCNO raw material as substitute for cocoa butter. Rotterdam CCNO spot month offers is up $280 or 25% from the start of the year and $330 or 31% higher from the same time last year. In the origin market CCNO FOB Philippines weekly average offer fell for the second week by a sharp $52 to settle at $1168 per tonne.
(Courtesy: POA, Singapore)