Investors should ‘buy the dip’ in palm oil prices
Investors should “buy the dip” in palm oil futures, Standard Chartered said, blaming a slump to three-year lows this week was based on a mistaken interpretation of output data, and foreseeing a jump of one-third in prices ahead.
“There are overwhelming indicators to suggest that crude palm oil is on the cusp of a move higher,” StandChart analyst Abah Ofon said, as Kuala Lumpur futures on Friday extended their recovery, closing 2.7% higher at 2,415 ringgit a tonne.
Mr Ofon acknowledged “a number of” downbeat developments for prices, whose near-20% slump over the past month has been blamed on soft Malaysian exports at a time when production should be at its seasonal high.
However, “the bearish sentiment is overdone.
“Prices are due for a significant upward correction.”