[ Back ]     [ Comments ]     [ Print ]

News Admin
 
Date
 10/08/2001
News Provider
 Mahamad Rodzi Abdul Ghani
News Source
 NULL
Headline
 Palm oil market tone still positive

Friday, August 10, 2001(The Star) - PALM oil futures prices were slightlytrimmed by profit-taking yesterday after hitting the RM1,300 level earlierin the week, but analysts believe the market tone is still positive.They are of the view that prices of palm oil futures would stabilisearound the RM1,200 level."Given the nature of supply and demand, prices should stabilise at theRM1,200 level," said the head of research of a stockbroking company.Said the chief executive of a big oil palm company: "At RM1,000 a tonne, Iwould regard it as beh pai'(not bad) and at RM1,300 it's 'chin chia ho'(very good). My profit margin has doubled in the past two months."The production cost per tonne of palm oil in Malaysia averages betweenRM650 and RM700.Palm oil futures shot up to the RM1,300 level after influential forecasterIvan Wong revised down his estimates for production and stocks for themonth of July.His orginal estimates, made on July 23, were for a production of 925,000to 930,000 tonnes and stocks of between 940,000 and 950,000 tonnes.Wong slashed his forecast for July to 885,000 tonnes for production and915,000 tonnes for stocks.Palm oil futures prices have risen subtantially in just a few months amidconcerns over what effects the dry weather during the first half of theyear would have on the second half of 2001.With production trending downwards and stocks coming down, analysts saidprices should be firm over the next six months.They said the share prices of plantation companies, which rallied alongwith the initial spurt in crude palm oil (CPO) prices, had not joined inthe subsequent rise in palm oil futures."Prices are taking a breather after the sharp run. People want to be sureCPO prices can be sustained," said a plantations analyst with a localstockbroking firm.The analyst also said plantation companies had not been aggressivelyselling forward. Instead, they were balancing their sales between theforward and spot markets, an indication that they expected prices to risefurther.


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