Home > Uncategorized > Bullish palm oil prospects

Bullish palm oil prospects

This is written by my colleague Zaidi Isham Ismail.

KUALA LUMPUR: This year can be bullish for crude palm oil,  depending on  government  policies on biodiesel,  severity of the prevailing dry weather and a possible El Nino  phenomenon.

 CPO prices breached the RM2,800-a-tonne mark on Monday after languishing between RM2,200 and RM2,500 for the first 10 months of last year.

London-based Godrej International director Dorab E. Mistry said CPO prices could have crashed to as low as RM1,700 last year but was saved to a certain extent by biodiesel. 

“For you to succeed in property, the three main strategies are location, location, location. Similarly last year, the reason CPO prices did not crash was biodiesel, biodiesel, biodiesel.

“This year, prices could be influenced by a possible El Nino and higher demand from Indonesia, which has become a major consumer like China and Europe,” Mistry told participants of the 25th Palm and Lauric Oils Conference and Exhibition: Price Outlook (POC 2014) here yesterday.

More than 2,000 delegates from more than 50 countries attended the three-day event, which was officiated by Deputy Prime Minister Tan Sri Muhyiddin Yassin. The POC 2014 is organised by Bursa Malaysia and CME Group.

Malaysian Palm Oil Council chief executive officer Tan Sri Dr Yusof Basiron said the dry weather could dictate the way CPO prices are headed in the next 24 months.”Palm oil trees’ female flowers can change into male flowers and this could lower fresh fruit bunches production. It’s anybody’s guess where CPO prices will head in the next 24 months … but right now, the dry weather is having an effect on the prices.”

On another matter, Yusof said the long-awaited Malaysian Sustainable Palm Oil is in the final stage of approval at the government level. “What’s important is that the producers and consumers are accepting it like the other certification standards and we have to look at all the entry points to ensure that it can go the distance,” said Yusof.

Meanwhile, Indonesian Palm Oil Association executive director Fadhil Hasan said oleochemical demand is rising in Europe  for the production of  products such as cosmetics and detergents. This could lend support to CPO prices in the coming months. “Even Boeing is carrying out experiments to use biodiesel as jet  fuel. CPO prices will also be determined by how Malaysia and Indonesia set their policies on biodiesel,” he said.

Advertisements
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: