RM2,800 to RM3,000 a tonne in the next few months as it braces for lower
As one of the most efficient planters and biggest palm oil producers
in the country, IOI’s price forecast is highly awaited by vegetable oil
traders and analysts around the world.
IOI executive chairman
Tan Sri Lee Shin Cheng said that he expected the group’s current-year
palm oil output to fall as much as 8 per cent to around 715,000 tonnes.
In the last financial year ended June 30 2009, IOI managed to squeeze
777,310 tonnes of palm oil from its 80-odd estates.
hold the forecast at between RM2,800 and RM3,000 per tonne because of
localised weather phenomenon like El Nino that affects output. There’s
also the labour shortage issue – workers come and go,” Lee told
reporters on the sidelines of the official opening of Hong Leong Bank’s
branch in Bandar Puteri Puchong, Selangor, yesterday.
At an economic conference two months ago, when palm oil was trading at
around RM2,400 a tonne, Lee said he was optimistic of prices trending
upward to between RM2,800 and RM3,000 a tonne.
The price did
rise to a high of RM2,700 a tonne, but has fallen rapidly in the last
When asked why, Lee replied: “The US dollar has
weakened against a stronger ringgit and that has dragged palm oil prices
(lower) to a certain extent.”
According to Bank Negara
Malaysia’s website, US$1 is at RM3.21 currently, from RM3.45 a month
Lee does not expect the palm oil price to continue
“Demand for palm oil is very strong all around the
world, especially traditional markets. Palm oil is the best vegetable
oil in the world. It is nutritious and far more flexible in its
applications,” he said.
Yesterday, third-month benchmark crude
palm oil on the Bursa Malaysia Derivatives market traded RM39 lower to
close at RM2,500 a tonne.
Source : Business Times