Higher CPO prices, low stockpiles only a brief reprieve for regional palm oil stocks

THE mini rally in palm oil prices and current low stockpiles have given regional palm oil companies some respite in light of the broader volatility-ridden agri commodities sector, but observers are cautious on the outlook for crude palm oil (CPO).

It has been a good run for palm oil so far this year. Inclement weather in India – one of the top importers of palm oil – prompted higher imports of edible oils, while palm oil inventory in Malaysia for February dropped to just over 1.9 million tonnes from two million tonnes in January. 

The lower stockpiles have in part caused CPO prices to track higher on futures markets in the region. Bursa Malaysia-listed CPO futures are up about 21 per cent this year as at market close on Mar 21 to RM4,352 (S$1,235.87) per tonne. At current levels, CPO prices are at a one-year high.