HIGHER GLOBAL VEGETABLE OIL SUPPLY TO DRAG CPO PRICES LOWER IN 2Q - FITCH
KUALA LUMPUR, March 27 (Bernama) -- Fitch Ratings foresees that Malaysia’s benchmark crude palm oil (CPO) prices will weaken from the second quarter of 2024 (2Q 2024) due to a higher supply of vegetable oil globally.
In its latest Asian Crude Palm Oil Monitor 1Q 2024 report, the rating agency said mild weather conditions and lower fertiliser costs would support output growth and sustain pressure on prices over the next 12 - 18 months.
Overall, its benchmark price assumption for 2024 and 2025 is US$700 per tonne. (US$1=RM4.73)
“We see two key upside risks for CPO prices. First, poor weather conditions due to a strong El Nino or La Nina event in the next 12 months.
“Second, a higher mandatory biodiesel blending ratio in Indonesia which will increase CPO consumption significantly,” it said.
Fitch Ratings said benchmark CPO spot prices have risen through 1Q 2024 to above US$900 per tonne by March 2024, from below US$800 per tonne in December 2023, due to relatively low palm oil inventories in key producers Indonesia and Malaysia, and market concerns on global vegetable oil output.
-- BERNAMA
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