Strong Commodity Prices Dampened by European Debt Crisis

After touching a high of RM2,700 per tonne in May, CPO has gradually

come down to trade below RM2,500 per tonne currently.

CPO, which

takes its cue from the lower crude oil and soybean prices, also had to

succumb to higher stock build-up and lower offtake from major overseas

buyers.

In the coming months, market players feared that local

palm oil stocks would increase further, particularly in September and

October, being seasonally high production periods for the year.

Malaysian

Estate Owners Association president Boon Weng Siew said CPO was not

likely to touch RM3,000 per tonne this year, on expectation of further

increase in palm oil stocks for the rest of 2010.

“Should crude

oil prices fall below US$70 per barrel, CPO prices are expected to come

down further,” he added. Palm oil biodiesel is a substitute for fossil

fuel.

To ensure stability in CPO prices, Boon said that Malaysia

needed to speed up the implementation of its mandatory biodiesel

programme. “We must quickly take some of the high palm oil stocks for

biodiesel production,” he said.

Source : The Star

You can share this posts:

Leave a Reply