Signs of recovery seen for CPO
The three key positive factors to be monitored closely are easing trade tensions between the US and China, higher exports of Indonesian CPO to the European Union (EU), as well as falling stockpiles in both Malaysia and Indonesia.
PETALING JAYA: The plantation sector looks to be more positive in the first quarter of 2019 (Q1’19), with signs of a sharp recovery in crude palm oil (CPO) prices, said Kenanga Research.
The three key positive factors to be monitored closely are easing trade tensions between the US and China, higher exports of Indonesian CPO to the European Union (EU), as well as falling stockpiles in both Malaysia and Indonesia.
The research house believes that there will be a notable pick-up in the first quarter, stemming from China due to higher festive consumption during Chinese New Year, as well as India, which will see a downward revision in import duty from 44% to 40%, effective Jan 1 2019, as per the Malaysia-India Comprehensive Economic Cooperation Agreement. The local production of fresh fruit bunches (FFB) has likely reached its peak in October and started slowing down in November.
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