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Date
 25/09/2001
News Provider
 Mahamad Rodzi Abdul Ghani
News Source
 NULL
Headline
 Guthrie upbeat on palmoil prices

KUALA LUMPUR, Sept 23 (Reuters) - An expected fall in output and possiblehoarding in case of retaliation for deadly aerial attacks against theUnited States could soon push the price of crude palm oil back above 1,000ringgit ($263) a tonne, Malaysian plantation giant Kumpulan Guthriebelieves.CPO prices, which reached about 1,300 ringgit per tonne in early August,have been particularly volatile since the attacks on New York andWashington on September 11.The benchmark third-month futures contract fell as low as 890 ringgitlast week from over 1,000 ringgit on the day of the attacks. But by Fridayit had climbed back to 993.In an interview late on Friday, Guthrie Group Chief Executive OfficerAbdul Khalid Ibrahim said he expected the recovery to continue, pushingprices back through the 1,000 ringgit barrier."The reason why I'm more bullish is partly because I think people willstock up in times of uncertainty," Khalid told Reuters.Traders are worried about a possible disruption in shipments from Malaysiaand Indonesia to Pakistan, a major market for the two top producers, inthe event of retaliatory attacks by the United States.Pakistan borders Afghanistan, accused by the United States of harbouringfugitive guerrilla leader Osama bin Laden, who the White House says is theprime suspect in the attacks.One plantation analyst noted that during the 1991 Gulf War CPO pricesactually appreciated about 30 percent despite the cloud hanging over thebig Middle East market, which accounts for about 15 percent of palm oilconsumption.Khalid said an expected decline in Malaysia's CPO output and stocks couldalso prop up prices.He said Malaysian palm oil stocks had fallen as low as 880,000 tonnes atthe end of August, less than a month's requirement and down by a steep320,000 tonnes from a year earlier.Khalid said there would be a seasonal increase in production and stocksthis month, but they would still be sharply below last September's levels.For the September-December period, Khalid expects Malaysian CPO productionto be 600,000 tonnes lower than a year earlier.He sees palm oil stocks ending the year at 900,000 tonnes, a three-yearlow.Khalid said he also expected exports to be robust, despite concern overdisruption to shipments, as palm oil is relatively cheap compared withother vegetable oils.India, the biggest palm oil market, is likely to start buying again in thenext few weeks because of the low prices, he said.For all of 2001, Guthrie expects Malaysia to produce 11.3 million tonnesof CPO, up from 10.8 million tonnes last year.


ECONOMICS & INDUSTRY DEVELOPMENT DIVISION
Malaysian Palm Oil Board ( MPOB ) Lot 6, SS6, Jalan Perbandaran, 47301 Kelana Jaya, Selangor Darul Ehsan, MALAYSIA.
Tel : 603 - 7802 2800 || Fax : 603 - 7803 3533