MARKET DEVELOPMENT
Maybank Research: Supply disruption expected to support CPO prices
Maybank Research: Supply disruption expected to support CPO prices
05.01.2022 (www.theedgemarkets.com) - KUALA LUMPUR (Jan 5): Maybank Research is positive on regional plantations as fear of supply disruption due to sporadic flooding across the country will continue to support crude palm oil (CPO) prices.
In a note on Wednesday (Jan 5), Maybank said Malaysia's CPO output for December 2021 is estimated to hit 1.45 million tonnes, a decline of 11% month-to-month, bringing output to 18.1 million tonnes in 2021.
“With record prices, we expect growers to deliver another set of sterling results in the fourth quarter of 2021,” it added.
On the CPO price, Maybank said the Futures CPO price curves on Bursa Malaysia Derivatives have trended higher since March 2020.
On the ongoing rainy season, it added that estate operations were disrupted, with no harvesting or road access to the mills were affected for several days in the parts of Selangor, Pahang, Melaka, Negeri Sembilan, Johor, Terengganu, Kelantan, and Sabah.
“We understand yield losses have been manageable thus far; compensated by high CPO prices. However, the sector is still not out of the woods as the current rainy season is forecast to last till March 2022.
“Any subsequent wave of floods or any prolonged floods could severely damage the infrastructures and further disrupt operations,” it added.