The Edge/Mohd Suhaimi Mohamed Yusuf photo -A +A
KUALA LUMPUR, Malaysia (July 6): Maybank Investment Bank (Maybank IB) Research has kept its “positive” outlook on the regional plantation sector, predicting that crude palm oil (CPO) prices will remain above RM3,000 per tonne in the near future.
CPO prices are predicted to continue high, according to the research house, due to constrained global oil supply and the possibility that the much-anticipated significant palm oil output recovery in the second half of 2021 (2H21) will not materialize.
Maybank IB Research held a price outlook session with Yeo, the president of Apical Group, a worldwide palm oil operator, to gather his thoughts.
“While Yeo did not give a particular price target, he believes that CPO prices will not fall below RM3,000 per tonne in the near future, and that it is now following the pricing of rival oils.”
“He estimates Malaysia’s inventory of palm oil would not reach 1.8 million tonnes by the end of the year,” it wrote in a note today.
According to Maybank IB Research, early expectations of significant palm oil output recovery in 2H21 may be disappointed by the market due to good rainfall over the last year.
This, he noted, was primarily due to smallholders’ under-fertilization since 2018.
Overall, according to Maybank IB Research, supply and demand dynamics are favorable of prices in 2022.
The research house stated, “His (Yeo’s) sole caveats are the unpredictable weather and government policies.”/n
