0 Comment(s)
Print
E-mail Xinhua, March 12, 2024
KUALA LUMPUR, March 12 (Xinhua) -- Economists have on Tuesday foreseen supply tightness to support crude palm oil (CPO) near term prices, after Malaysia's February palm oil stockpiles dipped below 2 million tons.
RHB Investment Bank maintained its CPO price assumptions for now -- at 3,900 ringgit (833 U.S. dollars) and 3,800 ringgit per ton for 2024 and 2025.
It continued to expect a higher CPO price environment in the first half in anticipation of a seasonally weaker output and El Nino impact.
However, it noted there are not many signs of festive demand, likely due to continued switching activities to cheaper sunflower oil and running down of inventories.
UOBKayHian also said that it projected inventory levels to remain low in March, driven by improved export activity supported by longer working days and a pre-Raya push in April.
However, the research house cautioned on the soybean supply entering the market in May, alongside a potential influx of palm oil.
"This coincides with a period of higher palm oil production, potentially exerting downward pressure on prices," it said.
It also maintained its CPO price assumption at 4,200 ringgit per ton for 2024.
According to Maybank Investment Bank, CPO price is likely to stay supported at current level of 4,000 ringgit per ton till end-March or early-April as palm oil production is presently in its low output cycle while demand is anticipated to stay resilient during the Ramadan period.
However, from the second quarter onwards, it anticipated palm oil output to pick up and hit its peak sometime in the third quarter, which will pressure CPO price on the downside as supply is no longer tight.
It also noted that the recent mini rally in CPO price is capped by the relatively weak prices of competing oils.
"Unless South American harvest surprises the market on the downside, we reckon this seasonal uptrend in CPO price will reverse gear sometime in the second quarter in anticipation of output recovery," it said.
Maybank projected CPO to stay at 3,810 ringgit per ton in 2023, before softening to 3,700 ringgit per ton in 2024. Enditem
Go to Forum >>0 Comment(s)