MARKET DEVELOPMENT
Better Outlook for CPO Futures CIMB Research Forecasts an Average CPO Price of RM2,700 Per Tonne in 2014
Better Outlook for CPO Futures CIMB Research Forecasts an Average CPO Price of RM2,700 Per Tonne in 2014
23/11/2013 (The Star) - Crude palm oil (CPO) three-month futures contract is likely to sustain above the RM2,600 level in the near term, underpinned by fundamentals such as lower CPO and soybean production as well as higher demand, said analysts.
CPO futures for February delivery rose to an intra-day high of RM2,692 yesterday, before closing RM13 lower to RM2,640 compared with RM2,653 on Thursday.
CIMB Research analyst Ivy Ng told StarBizWeek that the research house had forecast an average CPO price of RM2,700 per tonne in 2014.
She expected better prospects in the near term for CPO prices as production is typically low during the the monsoon season.
Affin Investment Bank Research and Kenanga Research also expect CPO prices to average RM2,700 per tonne next year.
Maybank Investment Bank Research, in a recent note, was optimistic on plantation stocks till early 2014 first quarter on a sustainable CPO price of RM2,600 per tonne, which would lift companies’ earnings.
In a report yesterday, RHB Research maintained its “neutral” weighting on the sector.
“We believe the average palm oil price will strengthen to RM2,600 next year from RM2,400 per tonne this year, as demand improves alongside the global economy,” the brokerage said.
It noted the growth hurdles for Malaysian planters in Indonesia as the neighbouring country has introduced a new regulation that limited unlisted plantation company or group to own a maximum 100,000ha of plantation acreage there.
It said local plantation players would have to either expand their footprint in other countries or consider listing in the archipelago.
The research unit opined that four companies under its coverage were likely to be impacted by the new ruling as they had crossed the 100,000ha level in Indonesia or were close to doing so. The firms are Sime Darby Bhd, Genting Plantations Bhd, Kuala Lumpur Kepong Bhd and TSH Resources Bhd.
CPO futures for February delivery rose to an intra-day high of RM2,692 yesterday, before closing RM13 lower to RM2,640 compared with RM2,653 on Thursday.
CIMB Research analyst Ivy Ng told StarBizWeek that the research house had forecast an average CPO price of RM2,700 per tonne in 2014.
She expected better prospects in the near term for CPO prices as production is typically low during the the monsoon season.
Affin Investment Bank Research and Kenanga Research also expect CPO prices to average RM2,700 per tonne next year.
Maybank Investment Bank Research, in a recent note, was optimistic on plantation stocks till early 2014 first quarter on a sustainable CPO price of RM2,600 per tonne, which would lift companies’ earnings.
In a report yesterday, RHB Research maintained its “neutral” weighting on the sector.
“We believe the average palm oil price will strengthen to RM2,600 next year from RM2,400 per tonne this year, as demand improves alongside the global economy,” the brokerage said.
It noted the growth hurdles for Malaysian planters in Indonesia as the neighbouring country has introduced a new regulation that limited unlisted plantation company or group to own a maximum 100,000ha of plantation acreage there.
It said local plantation players would have to either expand their footprint in other countries or consider listing in the archipelago.
The research unit opined that four companies under its coverage were likely to be impacted by the new ruling as they had crossed the 100,000ha level in Indonesia or were close to doing so. The firms are Sime Darby Bhd, Genting Plantations Bhd, Kuala Lumpur Kepong Bhd and TSH Resources Bhd.