Palm Oil Internet Seminar

Section 1: Price Directions:
Palm Oil Market Analysis: Factors that Influence Trade and Prices
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.

This paper will discuss the various factors that are expected to influence CPO price direction and in turn palm oil trades in 2017.

In 2016, CPO price climbed 46% to end the year at RM3,202.5 per tonne as palm oil supply was negatively impacted by the El Nino event in 2015.

We project CPO prices to trade in the RM3,000-3,300 per tonne range in Feb 2017.
However, the current high CPO price may not be sustainable in 2H17, as palm oil supply is expected to rebound on the back of higher FFB yields.

The main bullish factors for prices continue to be the weak ringgit, low stockpiles, seasonally lower palm oil output and higher biodiesel mandates in Indonesia.

Factors currently capping CPO price upsides are further release of rapeseed oil stocks by the Chinese government, competition from soybean oil and slower global economic growth.

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Questions & Answers (1) :
Muhamad Hafiz Abd Aziz
7 years ago
When is the next severe El Nino & when it will affect the FBB harvest?
Thanks for the question. History revealed that previous "strong" El Nino events occurred in 1982, 1997 and 2017. Based purely on this, it suggests that we could witness the next strong El Nino in 15- 18 years time. As for an El Nino event (regardless of strength), it could happen approximately every two to seven years.
7 years ago
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