CPO To Average US$619 A Tonne In 1H2015: Analyst

KUALA LUMPUR, March 4 (Bernama) -- The price of crude palm oil (CPO), which is very much underpinned by crude oil prices, is expected to average at US$619 (RM2,260) a tonne in the first half of this year and US$485 (RM1,770) a tonne in the second half. LMC International Ltd Chairman James Fry said the projections were calculated based on an estimated average Brent crude oil price of US$60 per barrel. Palm kernel oil, on the other hand, is expected to average at US$962 (RM3,510) a tonne for the first half and US$739 (RM2,695) a tonne for the second half. (US$1 = RM3.64) Although Brent crude oil price, which fell significantly in October last year, started stabilising in February this year, the well-known edible oil analyst expects Brent to remain under pressure. "US interest rates should rise and so, partly because of this, we expect Brent price to be under pressure," he said in his presentation at the Palm and Lauric Oils Conference (POC) 2015 here Wednesday. On the local front, Fry said weak Southeast Asian output would push the Malaysian Palm Oil Board's stocks to below 1.6 million tonnes in the first quarter, but the inventory would rise well above 2.5 million tonnes in the fourth quarter. He emphasised that a rise in the CPO inventory would happen unless Palm Methyl Ester (PME) sales were viable with lower CPO prices or there was a dramatic policy switch which could boost local PME sales. "Malaysia's monthly CPO output in January was particularly low, which was partly a response to exceptionally heavy rain in December, but there is nothing to suggest that the usual strong monthly seasonality of output has suddenly changed," he added. The three-day conference, which ends Wednesday, is organised by Bursa Malaysia and themed "Trade, Hedge and Be Ahead of Markets." -- BERNAMA