The Malaysian Palm Oil Board released data yesterday that showed an 8.8% MoM rise in Malaysia’s palm oil stocks, a 0.9% decline in palm oil production while exports were up 6.4%. Recall that our view on CPO price outlook had been bearish, given the higher CPO production expected in 2017, sustained low oil prices, and healthy global alternative oilseed production weighing on overall oilseed prices.
Recently, OCBC Treasury Research revised their CPO outlook from MYR2,250 to MYR2,600/MT by year-end, mainly due to the fall in crude oil production levels especially seen in Malaysia for the month of Jun, and overall demand for palm oil was deemed healthy in the first seven months of 2017.
This estimate also lies within Golden Agri’s anticipations of around US$600-700/MT, underpinned by expectations of demand and restocking by key markets including China and India. Note that these supply and demand factors have supported CPO prices, with prices up ~4% for the past month..... Read More
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