KUALA LUMPUR: Crude palm oil (CPO) futures prices are expected to reach RM3,500 per tonne this year due to the inability of supply to meet increased demand as well as bad weather, Frost & Sullivan’s Asia Pacific director Chris de Lavigne said yesterday.

In addition, the actions of governments in Europe and Asia Pacific to encourage the use of biofuel will also support prices.

“It is a price (RM3,500) that we could see happening again, and it may happen quicker than we expected,” said Lavigne, who spoke at the Palm & Lauric Oils Conference & Exhibition 2010 here yesterday.

“I don’t think CPO price would reach 2008 levels (of about RM4,000 a tonne), but we would see some big swings from its current price.”

Lavigne’s predictions add to the bullish stance taken by prominent industry analysts so far.

On Tuesday, palm oil industry analyst Dorab Mistry said he expected CPO futures to trade at between RM2,600 and RM3,200 per tonne in the second half of this year due to the El Nino weather effect.

Another analyst, Prudential Bache Commodities LLC senior oilseed & supervisory analyst Anne Frick had said she expected CPO to trade at RM2,400 to RM3,300 per tonne this year.


This article appeared in The Edge Financial Daily, March 11, 2010.