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Author: Tan KW   |   Latest post: Mon, 29 Nov 2021, 6:00 PM

 

CPO Prices Flying High

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CPO Prices Flying High

20-Oct-21 09:15

Ong Chee Ting, Regional Plantation Analyst, Maybank Investment Bank

Palm oil prices have been on a bullish trend like all other commodities. Ong Chee Ting, Regional Plantation Analyst from Maybank Investment Bank tells us the reasons for this and whether it is sustainable. He also weighs in with his top picks for the sector.

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calvintaneng Overall Maybank Ib analyst ok except his forecast that Cpo prices will retrace to Rm2,800 by 2022 is wrong on these reasons :

1. The conversion of USA fossil refineries to biodisel use will change the equation of demand for more soybean and corn as biofuel

This green energy push is a long term structural change

So cannot expect same status quo like before

2. Indonesia banning export of raw palm oil is another game changer

3. The limitation of palm oil conversion from forest due to ESG protest plus world population growth by 160 millions have also increased demand over supply

All these are factors that will push up Cpo prices

So to think palm oil cpo will fall back below Rm3000 might be wishful thinking
21/10/2021 1:50 AM
calvintaneng Another black swan event stems from Us relentless money printing that cause hyperinflation for all commodities

You can print a Trillion USD in one month

You cannot make 1 million palm oil to bear fruit in one month

Printing money will ultimately destroy the value of all things thus leading to very high prices like in Venezuela

Inflation also occurred when Arab raise oil prices embargo against USA in the 1970s
21/10/2021 1:54 AM
calvintaneng It takes only 10 minutes to print a million Us dollar

You need at least 4 to 5 years scouting for land, plant palm seedlings, wait for it to mature and then harvest

So by printing Fiat money out of thin air USA will destroy value for all

The only recourse is to raise prices by very high prices

Just like the Japanese banana currency collapsed after they surrendered at the end of 2WW

Bundles of banana notes were used to buy food until it was worthless

So will be the fate of printed fake money eventually
21/10/2021 1:58 AM
Mabel Calvin is smart!

Cheers Calvin!

Meow Meow Meow
22/10/2021 12:29 AM


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