WHILE crude palm oil (CPO) prices hit a record high on Wednesday, with three-month futures prices closing at RM5,015 per tonne, market analysts still expect CPO prices and plantation earnings to decline in 2022.
UOB Kay Hian Research maintains its “underweight” rating on the plantation sector, and expressed its concern over the sustainability of the current demand as the inventory in India and China has been replenished. The research unit is keeping its CPO price forecast for 2021 and 2022 at RM3,300 and RM2,800 per tonne respectively, but sees upside potential due to tight global edible oil supplies while demand is still relatively stable despite high prices.
UOB Kay Hian Research notes that for January to September 2021, the average price reported by Malaysian Palm Oil Board (MPOB) was at RM4,207 per tonne and the average for 2021 could come higher given CPO prices were traded between RM4,747 to 5,072 per tonne for Oct 1 to Oct 12.
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