PETALING JAYA: The plantation sector’s bearish supply-demand fundamentals in April will likely persist into May, with Indonesian production and exports anticipated to escalate and pressure crude palm oil (CPO) prices as inventory rises.
In April, CPO production in Malaysia rose to 1.5 million tonnes following a 7% month-on-month (m-o-m) fall in exports to 1.23 million tonnes and lower domestic usage, resulting in local inventory levels rising to 1.74 million tonnes.
“End-inventory of 1.74 million tonnes (2% m-o-m, 16% year-on-year) was 7% higher than consensus and 8% above our estimates.
April average CPO price of RM4,255 per tonne was firm but flat. However, prices are likely to ease in the second quarter as the South American soybean harvest is in full swing and Hari Raya as well as Indian election-related orders have faded,” Kenanga Research stated in a report.
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