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 CGS-CIMB: CPO price forecast to be range-bound until year-end

Malay Mail (27/09/2021) - KUALA LUMPUR, Sept 27 — The crude palm oil (CPO) price is expected to be range-bound or moderately lower till the end of the year, according to CGS-CIMB Securities Sdn Bhd.

In a note today, the research house said the price outlook predictions were made by speakers at the world’s leading edible oil and agri-trade conference Globoil India 2021, which was held in Goa, India on September 24 and 25, 2021,

Among the speakers, Godrej International director Dorab Mistry forecast the CPO prices to decline from RM3,800 per tonne in April 2022 to RM3,200 per tonne in September 2022.

“He also cut his 2021 estimate for Malaysia’s production to 18.2 million tonnes and predicted production for 2022 to rise to 19.2 million tonnes if the government alleviated the acute labour crunch,” said CGS-CIMB.

Another speaker, commodities consultancy LMC International chairman, James Fry anticipated a general easing of edible oil prices in the next six to 12 months, barring any macroeconomic contagion from China’s debt bubble and growing raw material cost inflation worldwide.

“He predicted the fall in prices will not be dramatic, with Bursa Malaysia derivatives’ CPO price averaging slightly below RM4,000 per tonne,” CGS-CIMB said.

Meanwhile, head of Hamburg-based analyst firm Oil World, Thomas Mielke said the Malaysian refined, bleached and deodorised (RBD) palm olein prices could average US$920 per tonne in March 2022, down nearly 23 per cent from the current level.

The research house said Mielke projected global palm oil output to rise by four million tonnes in 2021/22, accelerating from the 1.7 million tonnes rise for the same period a year earlier.

He believes that the four million tonnes increase in global palm oil supplies will be driven by Malaysia (1.1 million tonnes), Indonesia (1.9 million tonnes) and other countries (0.9 million tonnes).

“Mielke opined that the global production of eight major vegetable oils was set to increase sharply by eight million to nine million tonnes in 2021/22,” CGS-CIMB added. — Bernama

Read more at https://www.malaymail.com/news/money/2021/09/27/cgs-cimb-cpo-price-forecast-to-be-range-bound-until-year-end/2008770

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