KUALA LUMPUR, July 6 — Maybank Investment Bank (Maybank IB) Research has maintained its positive call on the regional plantation sector based on expectation of crude palm oil (CPO) prices staying at above RM3,000 per tonne in the near term.
Quoting industry veteran Datuk Yeo How, the research house said CPO prices were expected to remain lofty driven by tight global supply of oils and as the much-anticipated strong palm oil output recovery in the second half (H2) of 2021 might not materialise.
Maybank IB Research hosted a price outlook session with Yeo, who is president of global palm oil player Apical Group, to get his views.
“While Yeo did not provide a specific price target, he opines that CPO price is unlikely to go below RM3,000 per tonne in the near term, and it is now following the lead of competing oils’ prices.
“For palm oil, he believes Malaysia’s inventory will not exceed 1.8 million tonnes by year-end,” it said in a note today.
According to Maybank IB Research, Yeo believes the market may be disappointed by earlier projections of strong palm oil output recovery in H2 2021 due to the good rainfall experienced over the past year.
This, he said, was mainly due to under-fertilisation by smallholders since 2018.
Maybank IB Research said overall, he felt the supply and demand dynamics were quite supportive of prices for 2022 too.
“His (Yeo’s) only caveats are the unpredictable weather and government policies,” the research house added. — Bernama