KUALA LUMPUR: PublicInvest Research expects to see a weaker outlook on crude palm oil (CPO) in the second half of this year unless there is a significant pick-up in demand.
The research house said in its Monday report that CPO price has been continuously under pressure due to the heightening inventory outlook amid lacklustre demand from most major consuming countries.
This comes on reports that Malaysian palm oil inventories showed marginal growth of 1.2% month-on-month in July as production rebounded 12.8% after falling for three straight months.
PublicInvest reported that production in Peninsular Malaysia rose 15.9% month-on-month while climbing 9.5% in East Malaysia.
"The rebound in production was likely due to seasonal increase in production for most of the oil palm plantations. However, both regions experienced continuous decline in production compared to last year. We anticipate stronger growth in production at a later stage for this year due to a change in biological effect."
CPO exports also rebounded due to stronger demand from the EU despite weaker exports to all other major consuming countries such as China, Pakistan and the US.
Spot price recently fell to 1-year low of RM2,134/mt before recovering to RM2,205/mt. Year to date, it averaged at RM2,377/mt, inching closer to our full-year average of RM2,350/mt.
Celebrate Merdeka with 50% Off!
T&C applies.
