KUALA LUMPUR – Crude palm oil (CPO) prices may stay above the RM3,000 per tonne mark, with RM4,000 being the main hurdle for the coming months, says Rakuten Trade Sdn Bhd.
Its research team head Kenny Yee said the company remained bullish on plantation stocks despite the return of the palm oil export duty come January.
In December, Malaysia set the CPO export tax at 8% for January.
This rate is effective from January 1 to 31, marking the end of the zero export tax enjoyed from June to December last year.
Regarding the impact of biodiesel mandates on CPO prices this year, Yee said that with crude prices at current levels, the fuel remains “not too attractive a proposition, given its price point and expected export levies being a source of revenue for the industry”.
“Implementing the Malaysian biodiesel mandate will remain a challenge this year despite its advantages as a more sustainable fuel in the future,” he said in a statement today.
The B20 biodiesel programme for the transport sector was introduced last year to enhance palm oil demand, which involves blending 20% palm methyl esters with 80% petroleum diesel.
Meanwhile, Yee said the company foresees smaller cap stocks taking the lead this year, following the completion of portfolio re-jigging and supported by the persistent inflow of funds from retail investors who will continue to be key market participants.
“Blue chips and big cap stocks will still play a dominant role, but we expect to see heightened and sustained participation in small caps after a point, given their value and growth potential,” he added. – Bernama, January 4, 2021
