KUALA LUMPUR: Affin Investment Bank Research is maintaining its 2013 crude palm oil (CPO) average selling price assumption of RM2,800 a tonne.

It said on Tuesday this was based on an average price range of RM2,500 to RM2,700 in the first half of 2013 and RM2,700 to RM2,900 in the second half. Affin Research said the 2014-15 forecasts were also maintained at RM2,800 a tonne.

“Barring more favourable stock prices due to further market-wide weakness in the run-up to the GE13, we maintain our sector Neutral and stock calls,” it said.

Affin Research said in spite of the bearish mood and forecasts in the Price Outlook Conference 2013 conference last week, the third month CPO futures closed at a firmer RM2,450 on Monday.

“We continue to expect CPO prices to trade higher in the coming months. After the current low-yield season, palm oil closing stocks are expected to continue to trend lower on demand recovery, boosted by an abnormally high discount to soybean oil.

“Full implementation of the existing B5 policy by the end of this year and accelerated implementation of the B10 biodiesel policy by mid-2014 will further cut stocks by another 500,000 tonnes or more,” it said.

Source : The Star