This, coupled with below-historical-average inventory levels in major importers such as China, India and Bangladesh means that demand should come back more significantly in the short-term, the analysts point out.
RHB Bank Singapore is keeping “neutral” on the plantation sector, planning to revise its 2024 crude palm oil (CPO) price assumption of RM3,500 ($1,007) per tonne depending on El Niño’s severity.
Analysts Hoe Lee Leng and Syahril Hanafiah note that CPO prices recovered in recent weeks on El Niño fears as well as movement of global commodities such as crude oil and soybean. With the rise in soybean oil prices, CPO is now at a larger US$697 per tonne discount to the former, making the latter more attractive.
