CPO prices to move between RM2,450 and RM2,500 per tonne in 2018
KUALA LUMPUR: The average prices of Bursa Malaysia’s crude palm oil ( CPO) are expected to move between RM2,450 and RM2,500 per tonne this year, said Phillip Futures Sdn Bhd derivatives dealer, David Ng.
He also said the prices were expected to be weaker during the second half of 2018 on the back of a recovery in production.
On CPO’s indirect competitor, the soyabean oil, he said, Argentina, one of the largest producers of the commodity, had been affected by draught, posing a potential upside for the CPO.
“The weather is observed closely in that part of the world and I think if it looks good in the next couple of weeks, there would be some price pressure as it would have a trickle effect on palm oil,” he said.
Ng said this to Bernama on the sidelines of the annual Palm and Lauric Oils Conference and Exhibition, Price Outlook 2018/2019 recently.
He said the strengthening of the ringgit also had an effect on CPO prices.
“We have seen the local note strengthening of late, and we will be looking at how it will play out in the next couple of weeks, particularly when general election is around the corner.
“Inadvertently, that would affect CPO prices as well,” he said.
He said according to Oil World executive director, Thomas Mielke, the competitive edge of Malaysia and Indonesia, both major producers, had shrinked as they had been experiencing low yields and Malaysia facing labour shortages.
Ng said if production continued to decline, Malaysia and Indonesia would slowly lose their place in palm oil production, but said that comparatively, Indonesia had a rosier picture as it had a younger palm oil tree profile.
In the short term, he said, Malaysia should see CPO price increasing from January to April, but noted that prices may be weaker from May to October following an increase in production. — Bernama