2009
CRUDE PALM OIL: Immediate pullback in price expected.
Filed Under (Finance Help) by Admin on 21-04-2009
Price of Crude Palm Oil futures (FCPO) traded in bursa Malaysia breaks above the RM2,000 resistance level late March and surged to the current level of RM2,459 per metric ton, higher than the price I have expected which was RM2,260 and much bullish than other seasoned analysts I have mentioned in my previous article. Price is up for 5 consecutive weeks and has retraced 38.2% from the RM4,486 to RM1,331 down trend. So, will the uptrend be able to supported and sustained?
The rise in palm oil price is because of lower stock pile and higher exports. Stock inventory have declined for four months and is now at its 20-month low as the government encouraged planters to chop down trees above 25 years old in a replanting initiative. According to the Malaysian Palm Oil Board (MPOB), palm oil inventory fell about 13% in February to 1.4 million tonnes. Renowned analyst Dorab Ministry cautioned last month that if the Malaysian palm oil stocks fall below 1.5 million, it could a dislocation in the industry because of higher prices and delayed shipments.