KUALA LUMPUR: Palm oil experts have pegged crude palm oil (CPO) prices from as low as RM2,900 to a staggering RM4,500 per tonne this year and 2009 respectively.
London-based industry analyst Dorab Mistry, who is director of Godrej International Ltd, is bullish of CPO hitting RM4,500 per tonne between September and February 2009.
Oil World director Thomas Mielke is looking at a more conservative average CPO price of RM3,500 per tonne in 2008; LMC International Ltd managing director Dr James Fry has a forecast of below RM3,900 while Prudential Bache Commodities senior analyst Anne Frick's forecast ranges from RM3,000 to a more bullish RM5,000 per tonne.
The price forecasts were made at the end of Bursa Malaysia Bhd's 19th annual Palm and Lauric Oils Conference and Exhibition: Price Outlook 2008-2009 (POC 2008) yesterday.
Dorab Mistry
Last year, Dorab predicted that CPO price could hit RM3,000 per tonne over the September 2007 to September 2008 period. He had said the continued tight supply and high demand with one or two adverse weather problems could lead to an even bullish CPO price outlook.
On India, one of the world's largest CPO importers, Dorab said: “Its import will increase to 4.8 million tonnes this year from 3.8 million tonnes last year but soybean import will be slashed to about 800,000 tonnes from 1.3 million previously.”
Dr Fry, meanwhile, said the bull market in agricultural commodities had not shown itself to be fundamentally different from those experienced in the past.
“On this basis, the current bull-run will retreat from its peak within the next two to three months,” he said, adding that by August, CPO price could be traded as low as RM2,900 per tonne if the US Brent crude dropped to US$70 a barrel.
“The link between Brent crude oil and CPO arises via the demand for biodiesel,” he added.
Oil World's Mielke said the CPO market was vulnerable for an adjustment after a prolonged up-cycle.
He said given the underlying strong demand, CPO prices would in the short term stay above RM3,000 per tonne.
Oil World estimated that average CPO price would be at US$1,120 per tonne this year, 10% below the current average price of about US$1,250 per tonne.
Frick from Prudential Bache said: “A potential setback will see CPO trading at RM3,000 to RM3,600 per tonne if rival soybean oil fell to 51-56 US cents per bushel.”
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