12/08/2011 (Bernama) - ECMLibra Investment Research is convinced the crude palm oil (CPO) price will recover to the RM3,000-RM3,200 levels given the improvement in exports.

On Aug 9, the CPO price closed at RM2,970 per metric tonne, the lowest since October 2010.

In a research note Thursday, ECMLibra said over June, July and to date, exports have been driven predominantly by China, India and Pakistan.

"We view the pick up should continue and higher year-on-year production will rise from September onwards and should be able to satisfy demand," it said.

ECMLibra Investment also said it was maintaining a "neutral" call on the plantation sector.

Malaysia's July palm oil output was flat by -0.11 per cent month-on-month to 1.75 million metric tonnes, while exports rose nine per cent to 1.79 million metric tonnes.

Meanwhile, Midf Research said the output for Malaysia and Indonesia usually declines during the fasting month, due to a labour shortage, as estate workers go for their Hari Raya break.

"The higher export was supported by demand from China and Bangladesh as they are stocking up for the festive season. We expect demand to be maintained in view of the cheaper CPO price, wider discount to soybean price and an increasing biodesel use," it added.

On Monday, Midf reduced its forecast average CPO price for 2011 to RM3,200 per metric tonne from RM3,400 per metric tonne in view of the falling crude oil price.