KUALA LUMPUR, April 16 (Xinhua) -- Analysts have foreseen crude palm oil (CPO) prices to turn bearish at mid-year due to output recovery.
The Maybank Investment Bank said in a note on Tuesday that it posited that spot CPO price may have peaked for the year at 4,579 ringgit (955 U.S. dollars) per ton on April 3.
This was because the research house anticipated palm oil output to pick up stronger from May onwards and hit its seasonal peak sometime in the third quarter. It opined that this will pressure CPO price on the downside once the market anticipates supply normalizing.
It also noted that CPO price is presently trading at narrowed price discounts (relative to historical averages) against other major competing vegetable oils.
The Hong Leong Investment Bank also said in a note that it foresees CPO price to start tapering off when palm's seasonal output recovery takes place.
While CPO price averaged at 4,062 ringgit per ton, the research house is maintaining its 2024 and 2025 CPO price assumptions of 4,000 ringgit per ton and 3,800 ringgit per ton, respectively.
"We believe the stockpile will resume its uptrend from April, as production will likely remain on uptrend (due to seasonality) while exports will likely weaken on the back of the absence of festive-driven demand and palm's weak price competitiveness over other competing oils," it said.
MIDF Research also said in a note that it expects CPO price to moderate in the second quarter.
"We anticipate a softening (CPO price) in May, to approximately 3,946.7 ringgit as uneven weather begins to normalize, ahead of La-Niña event in the second half," said the research house. (1 ringgit equals 0.21 U.S. dollar) ■
