MARKET DEVELOPMENT
CIMB Research Retains Average CPO Price Forecast at RM2,230
CIMB Research Retains Average CPO Price Forecast at RM2,230
10/09/2015 (The Star) - CIMB Equities Research is maintaining its average crude palm oil (CPO) price forecast of RM2,230 per tonne for 2015, pending the price stabilisation measures to counter the falling CPO price.
“We continue to like First Resources, Astra Agro and Genting Plantations in the palm oil space,” the research house said on Wednesday.
It maintained a “Neutral” call on the sector.
Plantation Industries and Commodities Minister Datuk Amar Douglas Uggah Embas said a ministerial-level task force, comprising officials from Malaysia and Indonesia, were expected to meet within a month to roll out a price stabilisation mechanism and strategies to counter the falling CPO prices.
Besides the new price mechanism, the improvised implementation of biodiesel programmes in both countries was also named as a short-term measure.
During a recent bilateral meeting with his Indonesian counterpart, the minister said it was mutually agreed that a joint ministerial committee would be formed to work out coordinated strategies and monitor the implementation of these strategies.
“The price stabilisation measures, if rolled out successfully, could help improve CPO price sentiment in the near term. This is not the first time that the two governments are joining forces to reverse the plunge in CPO prices.
“In 2008, Malaysia and Indonesia announced plans to cut annual palm oil output by 800,000 tonnes with the replanting of 50,000 ha and 200,000 ha of palm oil estates in Indonesia and Malaysia, respectively,” CIMB Research said.
The research house said both countries also announced plans to raise domestic demand for biodiesel to 500,000 tonnes for Malaysia and 2.5 million tonnes in Indonesia through their biodiesel mandate programmes.
CIMB Research said the impact on medium-term CPO prices would depend on the effectiveness as well as the implementation of the policies to be announced.
“We continue to like First Resources, Astra Agro and Genting Plantations in the palm oil space,” the research house said on Wednesday.
It maintained a “Neutral” call on the sector.
Plantation Industries and Commodities Minister Datuk Amar Douglas Uggah Embas said a ministerial-level task force, comprising officials from Malaysia and Indonesia, were expected to meet within a month to roll out a price stabilisation mechanism and strategies to counter the falling CPO prices.
Besides the new price mechanism, the improvised implementation of biodiesel programmes in both countries was also named as a short-term measure.
During a recent bilateral meeting with his Indonesian counterpart, the minister said it was mutually agreed that a joint ministerial committee would be formed to work out coordinated strategies and monitor the implementation of these strategies.
“The price stabilisation measures, if rolled out successfully, could help improve CPO price sentiment in the near term. This is not the first time that the two governments are joining forces to reverse the plunge in CPO prices.
“In 2008, Malaysia and Indonesia announced plans to cut annual palm oil output by 800,000 tonnes with the replanting of 50,000 ha and 200,000 ha of palm oil estates in Indonesia and Malaysia, respectively,” CIMB Research said.
The research house said both countries also announced plans to raise domestic demand for biodiesel to 500,000 tonnes for Malaysia and 2.5 million tonnes in Indonesia through their biodiesel mandate programmes.
CIMB Research said the impact on medium-term CPO prices would depend on the effectiveness as well as the implementation of the policies to be announced.