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E-mail Xinhua, May 14, 2024
KUALA LUMPUR, May 14 (Xinhua) -- Analysts have foreseen higher stockpiles in Malaysia to exert pressure on crude palm oil (CPO) prices.
Maybank Investment Bank research said in a note that it expects Malaysia's CPO stockpile to trend higher in the coming months and will further put the CPO price on the downside when the market starts to anticipate the stockpile exceeding 2 million tons.
The research house expects CPO stockpile in Malaysia to be rebuilt more meaningfully, especially during the peak production months of August to October.
According to it, Malaysia's April stockpile of 1.74 million tons came in higher than market's estimates due to strong output recovery offsetting weak exports post-Ramadhan.
Maybank's CPO price forecast this year stands at 3,700 ringgit (784 U.S. dollars) per ton, lower than 3,810 ringgit per ton in 2023.
Hong Leong Investment Bank Research also said in a note that it believed Malaysia's stockpile will remain on an uptrend in May, as exports will likely remain subdued on the back of the absence of festive-driven demand and palm's weak price competitiveness over other competing oils.
The research house maintained 2024-25 CPO price assumptions of 4,000 ringgit per ton and 3,800 ringgit per ton, respectively, with the view that CPO price will start tapering off when palm's seasonal output recovery takes place.
Meanwhile, MIDF research said in a note that it forecasts the average local CPO delivery prices will close down 7.2 percent month on month, lowering to approximately 3,946.7 ringgit per ton in May, as uneven weather begins to normalize ahead of La Nina event in the second half.
Broadly, with global oilseed and soybean production in 2024-25 projected to increase to 687 million tons and 422 million tons, respectively, the research house opined that this will push other veg-oils and soybean oil prices into a downward trend.
MIDF's average CPO target price for 2024 stands at 3,600 ringgit per ton. (1 Malaysian ringgit equals 0.21 U.S. dollar) Enditem
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