Kuala Lumpur: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives (BMD) is expected to trade between RM4,000 per tonne and RM4,600 per tonne from now until March 31, 2025. Godrej International Ltd director Dorab Mistry provided insights into the market dynamics expected to influence this trend, highlighting the leanest production month, the lowest stocks, and disruption due to Ramadan as key factors in keeping the market active.
According to BERNAMA News Agency, Mistry projected a significant increase in palm oil production and a decrease in palm oil prices following Ramadan, suggesting that palm oil may become more competitive again. He anticipates that between April and November, BMD’s CPO futures will trade between RM3,600 a tonne and RM4,100 a tonne, leaning more towards the lower end of this range. These insights were shared during his presentation at the 36th Palm and Lauric Oils Price Outlook Conference and Exhibition 2025.
Mistry noted that the price outlook this year is also influenced by external factors such as the United States (US) Trump administration’s policies, including tariffs, sanctions, and the trade war, as well as energy prices and North American weather. He emphasized the trajectory of the US dollar as a potential mitigating factor, explaining that the Trump regime’s stance on a strong versus weak dollar could impact commodity prices, with a weak dollar typically leading to higher prices.
He further elaborated that while supply shrinkage is currently a concern, an expansion in supply is anticipated post-April or in the latter half of 2025. Additionally, North American planting and growing weather will be pivotal from May onwards. Mistry also predicted a recovery in soybean oil futures on the Chicago Board of Trade (CBOT) due to complicated and restricted incentives for US biofuels. While CBOT soybean oil futures are expected to remain stable to strong, the cash basis in South America is anticipated to remain weak, with sunflower oil prices continuing to hold a premium.