Analysts see Malaysia's palm oil prices to remain supportive in near term

0 Comment(s)Print E-mail Xinhua, March 13, 2023
Adjust font size:

KUALA LUMPUR, March 13 (Xinhua) -- Malaysian analysts have foreseen palm oil prices to remain firm in near term, underpinned by festive demand and Indonesia's export restrictions.

Maybank Investment Bank Research said in a note on Monday that the Eid al-Fitr Festival demand coupled with Indonesia's export restrictions in place till end-April will continue to support crude palm oil (CPO) spot prices at about 4,000 ringgit (891.5 U.S. dollars) per tonne in March and April.

Nevertheless, it maintained its view that CPO prices will ease by mid-year on expectation of seasonal output recovery.

The Malaysian Industrial Development Finance (MIDF) Research also expects average local CPO delivery prices to climb by 13 percent to 4,400 ringgit per tonne following distortion on Indonesia's palm oil level from March to April.

However, it also sees palm oil prices to decline by 11 percent to 3,837 ringgit per tonne in May after the Eid Al-Fitr Festival as a result of the Indonesian government's decision of lifting its export restriction in a bid to reduce glutting stockpiles.

Meanwhile, Hong Leong Investment Bank Research maintained 2023-2024 CPO price assumptions of 4,000 ringgit per tonne and 3,800 ringgit per tonne, respectively.

On a year-to-date basis, CPO prices averaged at 3,990 ringgit per tonne.

"In our view, CPO price will likely remain well supported at above 4,000 ringgit in the near-term, supported by weak near term production outlook arising from recent heavy rainfall, and Indonesia's biodiesel mandate and near-term restrictive export policies," said the research house.

But for now, it holds the view that CPO prices will weaken once Indonesia relaxes on its Domestic Market Obligation (DMO) policy.

UOB Kay Hian, on the other hand, expects CPO prices to linger between 3,500 ringgit to 4,300 ringgit per tonne for the first half.

"We expect strong production in the upcoming months as La Nina has ended. We also expect demand to improve in March, with Malaysia players benefitting from a slowdown in Indonesian exports," the research house said.

As for 2023, it maintained its CPO price assumptions at 4,000 ringgit per tonne.

"We reckon that CPO price would be higher in the second half, with inventory level starting to normalise in destination countries. This will be coupled by lower-than-expected CPO output as we expect that yield recovery may not be as good given the prolonged rainy weather and reduction in fertiliser application over the last three years," it said. (1 ringgit equals 0.22 U.S. dollar) Enditem

Follow China.org.cn on Twitter and Facebook to join the conversation.
ChinaNews App Download
Print E-mail Bookmark and Share

Go to Forum >>0 Comment(s)

No comments.

Add your comments...

  • User Name Required
  • Your Comment
  • Enter the words you see:   
    Racist, abusive and off-topic comments may be removed by the moderator.
Send your storiesGet more from China.org.cnMobileRSSNewsletter