Crude palm oil prices may improve on lower inventory, higher exports: research house
0 Comment(s)
Print
E-mail Xinhua, February 12, 2019
KUALA LUMPUR, Feb. 12 (Xinhua) -- Crude palm oil (CPO) average selling prices may improve to 2,400 to 2,500 ringgit (about 588 to 613 U.S. dollars) per metric ton this year as inventory levels are expected to slowly decline with higher exports and consumption of palm oil products, a research house said.
The Malaysian research house Affin Hwang Capital said in a report on Tuesday that stronger exports and consumption for palm oil will likely be supported by the energy market and food industries.
For comparison, average Malaysian Palm Oil Board locally-delivered CPO prices in January stood at 2,037 ringgit per metric ton.
Malaysia's CPO production in January declined further by 3.9 percent month-on-month to 1.74 million metric tons, mainly attributable to the seasonal monsoon factor.
Meanwhile, exports surged by 21.2 percent month-on-month to 1.7 million metric tons as main buyers such as China, India and European Union (EU) countries bought more of Malaysian palm-oil products.
Exports to China, India and the EU increased by 17.9 percent, 12 percent and 161 percent month-on-month respectively, to 317, 200 metric tons, 318, 300 metic tons and 243, 500 metric tons.
"We believe higher palm-oil exports to China was partly due to the Chinese New Year festivities while higher exports to India was partly due to the cut in import duties on crude and refined palm oil by the Indian government," said Affin Hwang Capital.
Given that palm-oil exports and consumption in January was higher than the production level, stocks declined to 3 million metric tons from the record high of 3.2 million metric tons in the prior month.
"We expect Malaysia's CPO production to remain weak over the next one to two months, attributable to the seasonal monsoon period, and to pick up once again in the second quarter," Affin Hwang Capital added.
The research house foresees the CPO production to rebound 2.5 percent year-on-year to about 20 million metric tons from 19.5 million metric tons in 2018, supported by the improving fresh fruit brunches yield and CPO oil extraction rate. Enditem
Go to Forum >>0 Comment(s)