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Wednesday, June 12, 2013

DBS says palm oil prices to remain under pressure

Source: http://www.theedgesingapore.com/the-daily-edge/business/44264-dbs-says-palm-oil-prices-to-remain-under-pressure.html

DBS Vickers expects planters to continue underperforming regional indices as crude palm oil prices are likely to remain under pressure for the rest of the year.

It has ‘hold’ ratings on Wilmar International, Bumitama Agri and Indofood Agri Resources. However, DBS has a “buy” rating and $2.14 target price on First Resources.

Malaysia’s palm oil production edged up 1.3% to 1.384 million tonnes in May from a month earlier, while inventories slid 5.1% to 1.816 million tonnes, data from the Malaysian Palm Oil Board showed on Monday.

China’s port-based palm oil inventory further expanded by 9% month-on-month to 1.386 million tonnes, indicating that the country’s palm oil imports will probably remain flat ahead of this year’s mid-Autumn festival, DBS said in a report on Tuesday.

Subject to stronger exports elsewhere, Malaysian palm oil inventories are hence expected to pile up again to 1.825 million tonnes in June and peak at 2.14 million tonnes in December, pushing palm oil prices down, DBS said.

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