CPO prices under revision

TheStar Thu, Dec 15, 2022 10:11am - 5 months View Original

PETALING JAYA: Crude palm oil (CPO) prices may trend within the RM500 range in the near term as price expectations are finely balance by competing bearish and bullish factors, according to traders and analysts.

Over the longer term, the global economic slowdown, improvement in production with the return of foreign workers to the estates and rising costs could drag the average price of CPO to the RM3,500 to RM3,900 per tonne range for 2023 compared with an estimated average CPO of RM4,800 to RM5,200 per tonne for 2022, said plantation analysts.Given such weak fundamentals, most analysts in their latest reports are revising downwards CPO price projections for next year with a “neutral” call on the sector.

Traders on the local derivative exchange, however, said the market price action is signalling at a price floor of around RM3,600 a tonne level supported by the still substantial soyoil CPO spread of US$500 (RM2,212) a tonne compared with US$800 (RM3,538) last month and fresh demand from buyer like India which appeared to be short on rapeseed oil as Black Sea supplies remain constrained.

“The CPO futures contract price is well supported at RM3,600 levels with fresh buying while prices on the top side of RM4,100 to RM4,200 is attracting sellers. Traders are buying on dips with recent bullish data on exports, production and stock levels for the first 10 days of December beating expectations,” said a futures broker representative.


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