03/10/2012 (The Star) - CIMB Equities Research describes the 25% price slump for crude palm oil (CPO) futures over five weeks was fuelled by speculative selling over fears of a build-up of stocks.

It said on Wednesday recent export figures and its channel checks on the September harvest suggest that stocks could rise to 2.5 million tonnes to 2.6 million tonnes by end-September, higher than expected.

“We believe there is sufficient storage capacity but the concern is that buyers may defer purchases. We expect CPO price to rebound by year-end due to its attractive pricing relative to soybean oil.

“Our Trading Buy call on the sector which is premised on a rebound in CPO price in December and a potential El Nino is intact, as are our top picks, Sime, IFAR and Astra Agro,” said CIMB Research.