KUALA LUMPUR: Crude palm oil (CPO) prices are expected to average around RM2,900 per tonne this year supported by strong demand from emerging markets, says Standard Chartered Bank Head of Commodities Research His Han Pin.
“Demand for CPO is expected to increase by 20 per cent over the next two years as we notice persistent growing demand from emerging countries.
“We predict CPO prices will start increasing in the first half of the year and continue to stabilise in the second half.
“It should average around RM2,900 per tonne in 2013,” he told Bernama after Standard Chartered’s Global Research Briefing 2013.
Hsi said demand would continue to grow as India, a large importer of
Malaysian palm oil, had a growing middle-class economy and this would
be a key driver for all commodity prices including CPO.
He said although CPO stocks were currently
hovering above two million tonnes the long-term potential growth for
this commodity was still intact as demand continuously exceeded supply.
Over the next few months, palm oil prices are expected to be
well-supported as it was trading at a discount of US$250 per tonne to
soy oil, its closest substitute.
“Currently, the discount is very large and would remain so as prices
depended, to a certain extent, on the harvesting season and weather
changes.
In the next few months, stocks are expected to deplete and this would give reason for CPO prices to move upwards and narrow the discount between both edible oils.
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