KUALA LUMPUR, June 13 (Xinhua) -- Malaysian analysts foresee a recovery for crude palm oil (CPO) prices in the second half on the back of stronger demand from China and India.
Public Investment Bank said in a report Thursday that the CPO price is expected to improve to 2,100 ringgit to 2,300 ringgit per ton in the second half, from a year-to-date level of 1,997 per ton.
The research house however maintained its full-year average CPO price forecast of 2,200 ringgit per ton.
Palm oil exports registered growth for a third straight month, up 3.5 percent to 1.71 million tonnes, the highest level seen since August 2016.
"Despite the sharp decline in inventory, CPO prices remained muted as market is wary that it may not be sustainable with high production cycle kicking in soon," said Public Investment Bank, adding that CPO futures stood at one-month low of 1,986 per ton, which is a barely break-even level for small and inefficient players.
However, the research house remains positive on Chinese and Indian demand this year, noting that China saw the strongest CPO demand from Malaysia since 2015, as they switch their demand from soybean oil to palm oil.
Driven by the preferential import duty on refined palm oil, India's palm oil demand from Malaysia also increased.
Year-to-date, Malaysia's palm oil exports to China rose 26.6 percent to 899,000 tonnes, while exports to India surged 76 percent to 2.16 million tonnes.