CPO falls further

CPO Futures contracts for April delivery dropped RM42 or 1.7% to RM2453 per ton on Malaysia Derivatives Exchange this morning, while May delivery declined RM30 per ton. The commodity was mainly under pressure last week on stronger USD and higher than expected stockpiles.

Still, this month's average price is far above the January 2009 average of RM1891 per ton. But it is far below January 2008's average of RM3212 per ton. The highest monthly average price last year was in May at RM2833/ton. Early this year, CPO futures have crossed RM2700/ton, but retreated on stronger USD, weakening of crude oil, and higher stockpiles in Malaysia and Indonesia.

Indonesia, the largest CPO exporter, expects a 10% export growth this year to about 17.6 million tons. Traders said CPO may test levels of RM2350-2450 on an estimated higher stockpiles this month.

Plantation stocks opened mixed in the region this morning, with Golden Agri gained 2.63% on SGX, while Bakrie Sumatra lost 3% on IDX. Sampoerna Agro and BW Plantation also lost 2.5% and 3.45% respectively on IDX.

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