After touching a high of RM2,700 per tonne in May, CPO has gradually
come down to trade below RM2,500 per tonne currently.
CPO, which
takes its cue from the lower crude oil and soybean prices, also had to
succumb to higher stock build-up and lower offtake from major overseas
buyers.
In the coming months, market players feared that local
palm oil stocks would increase further, particularly in September and
October, being seasonally high production periods for the year.
Malaysian
Estate Owners Association president Boon Weng Siew said CPO was not
likely to touch RM3,000 per tonne this year, on expectation of further
increase in palm oil stocks for the rest of 2010.
“Should crude
oil prices fall below US$70 per barrel, CPO prices are expected to come
down further,” he added. Palm oil biodiesel is a substitute for fossil
fuel.
To ensure stability in CPO prices, Boon said that Malaysia
needed to speed up the implementation of its mandatory biodiesel
programme. “We must quickly take some of the high palm oil stocks for
biodiesel production,” he said.
Source : The Star
