PETALING JAYA: Better palm oil harvests and rising global biofuel demand are expected to keep crude palm oil (CPO) prices stable in the medium term, which bodes well for United Malacca Bhd
(UMB), say analysts.
Kenanga Research said CPO price has been trading sideways after a correction in mid-2022 and a fragile recovery will likely take place beyond this year and into 2024.
The weaker soybean harvest in Argentina and high production costs are expected to continue to drive CPO price volatility.
“Supply should still inch up year-on-year (y-o-y) thanks to the record Brazilian production but very poor Argentinean harvest is pointing to a much smaller increment. Consequently, edible oil inventory has less room to absorb any negative surprises.
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