CPO to benefit from US-China trade conflict, says analyst

CPO to benefit from US-China trade conflict, says analyst


Jakarta — Indonesia’s and Malaysia’s crude palm oil (CPO) products will benefit from the trade conflict between the United States and China, a securities firm analyst has said in Jakarta, kontan.co.id reported on Monday (09/04). Following the U.S.’s increasing tariffs on Chinese steel and aluminum products, China had threatened to impose high tariffs in retaliation on a number of U.S. goods, including soy beans, which might impact CPO products, said Danareksa Sekuritas analyst Yudha Gautama. “If the soy bean price is too high, Chinese consumers may shift to CPO products, he said. In 2017, China absorbed 64 percent of global soy bean products, or 93.5 million tons. In the same year, the United States was the largest soy bean producer with a total of 116.9 million tons, which projected to increase to 119.5 million tons in 2018. PT Henan Putihrai Asset Management analyst Yosua Zisokhi added that the price of CPO had started to strengthen in recent days. “Plantation stock issuers would benefit in short term with the increase in the average selling price of CPO,” he said. However, Yosua said this would be only temporary, as the U.S. would soon find alternative soy bean markets. He estimated that CPO prices would reach 2,800 Malaysian ringgits (US$724.84) per ton. Yudha said the CPO price had been corrected by about 3.85 percent in the first quarter of 2018. “If the CPO price had reached 2,800 Malaysian ringgit per ton in 2017, this year’s price will be 2,700 Malaysian ringgit.

Source: thejakartapost.com/kontan.co.id