Higher palm oil demand, tight supply boost Golden Agri's optimism for rest of the year

PALM oil plantation owner E5H is positive on the outlook for the rest of the year amid favourable demand and supply dynamics.

In a call to discuss the company's financial results for the first half of the year ended June, the group's director for investor Relations Richard Fung said that on one hand, demand for crude palm oil (CPO) has been stoked by countries recovering from the brunt of the Covid-19 pandemic and the resumption of economic activity. On the other hand, supply has been kept tight due to dry weather conditions in producing countries such as Indonesia and Malaysia.

This in turn boosted benchmark palm oil prices. The international CPO (FOB Belawan) price during H1 was US$1,088 per tonne, some 77 per cent higher than the price in the corresponding period last year.