KUALA LUMPUR, Jan 11 ― CGS-CIMB is projecting the price of crude palm oil (CPO) to remain firm at RM4,500-RM5,500 per tonne in January 2022, driven by tight near term global edible oil supplies and the labour shortage in Malaysia.

The research house is maintaining price forecasts of RM3,600 and RM3,240 per tonne for the full years of 2022 and 2023, respectively.

"We are of the view that the CPO price could remain high till the first quarter of 2022 before trending lower when the palm oil supply recovers and crushing activities of oilseeds improve,” it said in a research note. "The strong CPO price and expectations of a gradual return of foreign workers are positives. However, these are offset by concerns over rising fertiliser costs and the La Nina event in 2022 currently.”

CGS-CIMB said palm oil stocks are likely to decline by 4.5 per cent month-on-month to 1.51 million tonnes by the end of January 2022, with output and exports falling 12.5 per cent and 20 per cent month-on-month, respectively.

It said Malaysia's palm oil stocks fell 13 per cent month-on-month to 1.58 million tonnes in December 2021 due to lower output and higher local consumption.

The stock level was 10 per cent below its forecast of 1.75 million tonnes.

Meanwhile, exports fell 3 per cent month-on-month and 13 per cent year-on-year to 1.42 million tonnes in December 2021 due to weaker exports to China, India, and Pakistan, potentially due to demand rationing by price-sensitive consumers and tight supplies.

In 2021, palm oil exports fell 11 per cent year-on-year to 15.5 million tonnes. ― Bernama