MCX crude palm oil settles near lifetime high; expert suggests buy-on-dips strategy


Crude palm oil futures edged higher to settle at near-record high of Rs 1,174.30 per 10 kg after touching a fresh lifetime high of Rs 1,174.50 on Friday during intraday. Malaysian palm oil futures soared 2.97 percent to settle at 3,920 Ringgits on Bursa Malaysia Bhd.

It ended the week with a gain of Rs 37.1 or 3.26 percent on the domestic bourse. Crude palm oil prices jumped in three out of the five trading sessions on the MCX.

The agri commodity has been trading higher than 5, 20, 50, 100 and 200 days’ moving averages on a daily chart. The momentum indicator Relative Strength Index (RSI) is at 63.24, which indicates bullish movement in the prices.

According to Solvent Extractors Association (SEA) data, the country imported 1.68 million metric tonnes of CPO from Malaysia and 1.29 million metric tonnes from Indonesia from November 2020 to March 2021.

Indian government slashed import duty on crude palm oil to 10 percent from 27.5 percent to cool off soaring edible prices in domestic markets.

“During the week, price traded strongly and sustained above the 10-day moving average. Prices are increasing because of low stock and high demand globally, dollar weakness is supporting the price and we may see fresh all-time high in the coming week”, said Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited.

In the futures market, Crude Palm Oil (CPO) for April delivery touched an intraday high of Rs 1,174.50 and an intraday low of Rs 1,163 per 10 kg on MCX. So far in the current series, CPO has touched a low of Rs 883.10 and a high of Rs 1,174.50.

CPO delivery for April gained Rs 16.10, or 1.39 percent to settle at Rs 1,174.30 per 10 kg with a business turnover of 4,380 lots.

CPO delivery for May climbed Rs 25.90, or 2.33 percent to Rs 1,137.80 per 10 kg with a business volume of 4,475 lots.

The value of April and May’s contracts traded on April 16 was Rs 270.02 crore and Rs 230.17 crore, respectively.

Next Week Strategy

Purohit said traders should look for buy-on-dips strategy in MCX Crude Palm Oil future. The ideal range to enter a buy position should be around Rs 1,160- Rs 1,162 by keeping a stop loss around Rs 1,147 for a target of Rs 1,192.

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