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E-mail Xinhua, July 11, 2024
KUALA LUMPUR, July 11 (Xinhua) -- Analysts on Thursday maintained the crude palm oil (CPO) prices forecast after Malaysia's palm oil stockpiles remained on an uptrend.
Maybank Investment Bank said in a note that it retained its CPO average selling price forecast of 3,700 ringgit (787 U.S. dollars) per ton for 2024.
"Barring any weather surprises especially in the Northern Hemisphere, palm oil prices in the second half will likely weaken from the first half on seasonal increase in palm oil supply as well as oilseeds," the research house noted.
It also said palm oil's inventory build-up will likely continue till October/November, in tandem with seasonal peak output cycle.
Hong Leong Investment Bank Research also said in a note that it maintained its 2024-2025 CPO price assumptions of 4,000 ringgit per ton and 3,800 ringgit per ton.
According to the research house, the uptrend in palm oil stockpile will likely continue into July, on the back of the continuation of seasonal uptick in cropping pattern, which will likely offset potential higher exports demand arising from palm's improved price competitiveness against soyoil and the absence of festive driven demand.
Kenanga Research, on the other hand, expects CPO prices to stay firm, averaging at 3,800 ringgit per ton in 2024 as supply increment trails demand growth.
The research house noted that palm oil prices normally firm up in the first quarter then ease quarter on quarter till the third quarter, which is often the weakest quarter for prices but the best for palm oil production.
It is noted that for the second quarter, instead of softening slightly, CPO price inched up 1 percent quarter on quarter on tighter though still manageable inventory outlook.
Nevertheless, it said third quarter CPO prices should dip as South American soyabean harvest comes to an end. Likewise, Kenanga continues to expect inventory easing further in 2025.
"All in all, 2024-2025 inventories look adequate but the tightening trend is supportive of CPO prices," said the research house. (1 ringgit equals 0.21 U.S. dollar) Enditem
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