CPO to stay above RM3,000 till June
By Farah Adilla - May 11, 2021 @ 9:54am
KUALA LUMPUR: Crude palm oil (CPO) price will stay above RM3,000 level in the fist half (1H) of 2021, MIDF Research said.
MIDF Research said this would be supported by the anticipated supply tightness as well as the attractiveness of CPO price compared to other edible oils.
"However, we presume CPO price will ease in 2H 2021 due to better production level as a result of rainfall which will should boost palm oil fruit yields," MIDF Research said today.
The research house said in April, the average CPO spot price increased by 4.8 per cent month-on-mont (M-o-M) to RM4,263.11 per tonne from RM4,067.17 per tonne in the previous month.
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The highest CPO price recorded in April was on April 23 at RM4,428.50 per tonne.
MIDF Research said this was primarily in view of stronger price of soybean oil, low inventory level despite an increase in production, and better export demand.
"We believe that tight stock level was mainly impacted by the supply side rather than export demand," it said.
MIDF Research has maintained its "positive" call on the plantation sector, with 2021 CPO target price of RM3,000 per tonne.
"We view that the existing landscape will lead to a strong increase in CPO price.
"We are anticipating tight soybean supply, to lead to stronger soybean price which in turn, should drive CPO selling price higher.
"On top of that, the subdued inventory level of palm oil in Malaysia would also act as a catalyst to CPO price," it said.