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KUALA LUMPUR, April 7 -- Malaysia’s crude palm oil prices (CPO) are expected to soften to between RM2,200 and RM2,600 per tonne over the next 18 months, said Moody's Investors Service.
Moody’s Corporate Finance Group vice-president and analyst Nidhi Dhruv said based on historical prices, the current price level would not be sustainable for a prolonged period.
She however, said the prices would be supported by weather conditions and labour shortage problems due to the Conditional Movement Control Order, as these would affect the production yields and supply of the fruits.
“Aside from the commodity prices movement, other key things that we are watching for are potential disruption in producer operations, regulatory development, and environmental, social and governance (ESG) considerations,” she said at the virtual Moody’s Inside ASEAN Malaysia media roundtable today.
At the time of writing, the benchmark CPO futures contract for June 2021 delivery climbed RM43 to RM3,845 per tonne.
The local CPO futures have been trading at the highest level last seen in 2012 since the end of last year.