Palm Oil Internet Seminar

Section 1 : Palm Oil Price Fundamentals:
CPO Price and 2nd Half 2016 - CPO price outlook : Fundamental vs Technical view
By: Ms. Ivy Ng

Ivy Ng is currently the Regional Head of Plantations and Head of Malaysia Research in CIMB. She is a CFA charterholder and holds a BSc in Economics from the London School of Economics. She has been covering the palm oil sector since the mid-90s and expanded her coverage to include the regional palm oil companies since 2005.

She joined CIMB in 2005 and currently covers regional plantations and conglomerates. Ivy has been an investment analyst since 1994, with prior stints in Affin-UOB, Peregrine Research, Hwang-DBS Securities and GK Goh Research.

Ivy was ranked number one by Asiamoney polls in the Malaysian industrial sector in 2014 to 2016 and utilities sector in 2007 and 2008. She was also voted Malaysia’s best power analyst in 2007 and best plantation analyst in 2008 by The Edge.

In our paper, we analyse the prospects for CPO price in 2nd half of the year 2016 using both fundamental and technical analysis. From a fundamental perspective, we are of the view that the key factors that will be driving CPO price in 2nd half are:

(1) Chinese demand;
(2) palm oil yields;
(3) Biodiesel demand in Indonesia and Malaysia; and
(4) US soybean crops.

We project CPO price to weaken in 3rd quarter before recovering in late 4th quarter and average RM2,400 per tonne for 2nd half of 2016. This is lower than the 1st half of 2016's average of RM2,517 per tonne. On the technical view, we see CPO trading in a sideways to higher in the coming months.

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Questions & Answers (1) :
ikhwan b shamsuddin
8 years ago
most of the plantation company are preparing next years budget,so the assumption for cpo price-RM 2250,RM 2450,or RM 2600.because in the star articles on 8/4/2016 from cimb research -title palm oil near term prospects fade mentioned the price for 2017 RM 2600 per mt tq
Dear Ikhwan, Thanks for the question. We are forecasting CPO prices to average RM2,450 per tonne in 2016 and RM2,600 per tonne for 2017.
8 years ago
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