Kok: CPO prices to see a sharp recovery in 2019
KUALA LUMPUR: Crude palm oil (CPO) prices are expected to see a sharp recovery this year to reach well above RM2,300 per tonne.
Yesterday, CPO price closed at RM2,075 per tonne at market closing. When asked to forecast on palm oil prices, Primary Industries Minister Teresa Kok Suh Sim affirmed the commodity would likely average at between RM2,700 and RM2,800 per tonne this year.
She justified her bullish outlook with initiatives currently being undertaken by her team to expand expand new export markets in China, Africa and the Middle East.
In addition, she said India's recent move to reduce the import duty on palm oil will also support shipments of the edible oil from Malaysian shores to the Land of Spice.
More than 80 per cent of global palm oil production comes from Malaysia and Indonesia collectively.
Kenanga Research, in its notes to investors today, said it expect CPO prices to improve as early as the first quarter of this year.
The research firm said CPO price is expected to improve to between RM2,300 and RM2,400 per tonne by March 2019 and edge up further to between RM2,500 and RM2,600 per tonne by mid-year.
Kenanga forecast that this year CPO price would average at RM2,400 per tonne, 7 per cent more than 2018.
“We believe this a strategic time to accumulate shares in plantation companies with the focus on undervalued upstream players,” the research firm added.
At a media briefing at her ministry yesterday, Kok said the government will continue to put pressure on the European Union (EU) if the bloc continues to discriminate palm oil.
France and Norway lawmakers have legislated to ban palm biofuels while EU has remained steadfast in its cub and eventually ban of palm biodiesel from Malaysia and Indonesia by 2030.
Kok said Malaysia is not afraid to take the issue up to the World Trade Organisation as the EU continues with its lobby to ban palm oil. She, however, cautioned such decision would only be made collectively with Indonesia, if the situation worsens.
As for Norway, Kok said she has written to Norway’s ambassador Gunn Jorid Roset of Malaysia's protest over Norway’s plan to ban palm biofuels from January 1, 2020. “We appeal to Norway to reconsider bilateral trade ties and reverse its plan to ban palm biodiesel.”
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