KUALA LUMPUR, Aug. 13 (Xinhua) -- A Malaysian research house has on Tuesday raised its crude palm oil (CPO) price assumptions by 2.8 percent to 4.1 percent given the high prices in the first half.
Maybank Investment Bank said in a note that while it continues to anticipate CPO to be seasonally under price pressure over the next two months, it now raised its 2024/2025 CPO average selling price forecasts to 3,850 ringgit (865 U.S. dollars) per ton and 3,700 ringgit per ton.
According to the research house, year to date, Malaysian Palm Oil Board's CPO spot price of 4,019 ringgit per ton has performed better than its expectation.
This was owing to the tight supply situation in Indonesia due to the lagged impact on Indonesia's CPO yield post the third quarter of 2023's mild El Nino, it said.
The weak ringgit in the past seven months also lifted CPO price in ringgit terms, it noted.
Despite relatively tight stockpiles due to strong exports in July, it said that three-month CPO future price was down 1 percent day on day on Monday, which seems to suggest that the market is looking forward to a seasonally bigger crop and rising stockpile in the coming months.
Assuming the export trend remains weak throughout the month of August, Maybank anticipates a meaningful build-up in stockpile during the peak production months of August to October. ■