KUALA LUMPUR, Dec. 11 (Xinhua) -- Analysts have on Wednesday foreseen crude palm oil (CPO) prices to stay high underpinned by tight supply.
Hong Leong Investment Bank Research said in a note that it maintained CPO price assumptions of 4,150 ringgit (938 U.S. dollars) per ton this year and 4,000 ringgit per ton for the next year, with the view that CPO price will remain at elevated levels, supported by weak near-term output.
According to the research house, Malaysia's palm oil stock level will likely decline further in December, as seasonally weaker exports arising from the absence of festive-driven restocking activities and winter season will be offset by seasonally lower cropping patterns.
The Malaysian Palm Oil Board (MPOB) announced on Tuesday that Malaysia's palm oil stockpiles at the end of November fell 2.6 percent to 1.84 million tons from the prior month.
Meanwhile, Maybank Investment Bank said in a note that while it is concerned over the sustainability of the present high CPO price of around 5,000 ringgit per ton, the short-term outlook in the first quarter of 2025 looks promising.
According to the research house, the positive outlook is premised on resilient demand ahead of an early Ramadan and Chinese New Year that coincides with the typical low output cycle of the first quarter.
"MPOB's November stockpile has continued to ease seasonally and remained tight. The inverted CPO futures price curve continues to suggest the present tightness in supply would last till early 2025," it noted.
MIDF Research also said in a note that the potential palm oil export ban from Indonesia at the onset of the Raya festival could pose risks to palm oil supply availability in the first quarter to the second quarter of 2025.
With the expected decline in ending stocks, it has projected 2025's average CPO price at 2.4 percent year on year higher to approximately 4,300 ringgit per ton.
RHB Investment Bank also said in a note that it sees stronger fundamental prospects in 2025 on tighter global supply, increased biodiesel demand and low stock levels.
According to RHB, Malaysia's CPO stock levels are likely to stay below the 2 million tons mark in 2024, as production continues to moderate and exports gradually improve. (1 ringgit equals 0.23 U.S. dollars) ■