TWO palm oil industry gurus have issued forecasts that are generally
less bullish on crude palm oil (CPO) prices this year, predicting them
to hover between RM2,400 and RM2,900 a tonne.
“Current palm oil prices are already reflecting the fundamentals. I
think prices may be close to their highs if there are no additional
bullish factors like further yield damage from the prolonged dry
weather. I don’t expect prices to surpass RM3,000 per tonne, though,”
Oil World editor Thomas Mielke said at the annual Palm and Lauric Oils
Conference and Exhibition (POC) in Kuala Lumpur yesterday.
“When I say we may not be far away from the peak, I don’t mean to be
bearish. Prices can shoot up on speculative demand. Prices could trade
between RM2,400 and RM2,900 per tonne, averaging at RM2,550,” he added.
On the chances of palm oil trading at a premium over soyaoil, Mielke
said: “I don’t expect it to, but it is possible. If it does, it won’t
last.”
Not All Bullish on CPO Price Trend
LMC International chairman Dr James Fry also believes that palm oil prices are “already somewhat too high”.
“I fear we face a double dip recession in Europe. Many governments are
cutting budget to reduce deficit borrowings. This will drive up
interest rates, which will magnify a recessionary impact,” he said.
Fry reiterated his long-held view that palm oil prices would continue to be highly influenced by petroleum prices.
“High crude oil prices have encouraged exploration – lifting supply and
slowing demand. Palm oil is expected to hover around RM2,600 per tonne,
settling to RM2,400 per tonne towards the latter part of the year,” he
said.
Mielke and Fry’s forecasts are in contrast to their
counterpart, Godrej Group director Dorab Mistry, who on Tuesday gave
bullish comments that palm oil prices could scale new heights in the
range of RM2,800 to RM3,200 a tonne after July on the prevailing El
Nino conditions, Malaysian government’s ongoing replanting scheme and
tree stress.
Meanwhile, the Malaysian Palm Oil Board’s latest
statistics showed the CPO output in the first two months of the year
was 2.48 million tonnes, about 40,000 tonnes less than a year ago.
However, monthly palm oil exports have been relatively strong at more
than RM4.3 billion compared with last year’s average of RM4.1 billion.
Source : Business Times by Ooi Tee Ching
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