KUALA LUMPUR: Moody’s Investors Service has raised its price sensitivity range for crude palm oil (CPO) to between RM2,800 and RM3,200 per tonne from between RM2,200 and RM2,600 per tonne through 2022.
Vice-president and senior analyst Maisam Hasnain said the revision was made on the back of supply disruptions, low inventory levels and strong prices of competing oils.
While CPO prices would not fall substantially any time soon, they are unlikely to sustain at current spot market levels over the longer-term, he said.
“CPO prices are continuing a rally that started in mid-2020. Supply-side constraints, including labour shortages in major producer Malaysia (A3 stable), will keep CPO prices elevated through 2022,” he said.
Hasnain said although Malaysia planned to allow the return of 32,000 foreign workers for the plantation sector, the ramp-up in work would take time and supply constraints would likely persist for the next six to 12 months. —Bernama
TAGS: Moody’s, CPO, Soybean, Maisam Hasnain, Malaysia, Oil