KUALA LUMPUR: Al-Hadharah Boustead REIT (Al-Hadharah REIT), Malaysia’s only Islamic plantation real estate investment trust, expects crude palm oil (CPO) prices to strengthen between RM2,500 and RM2,600 per tonne by mid-year.
Chairman Tan Sri Lodin Wok Kamaruddin said prices would be supported by strong demand from Muslim countries during the fasting month of Ramadhan coupled with lower CPO stocks.
CPO prices are currently hovering around RM2,200 per tonne.
“Since February, the inventory level has started to come down from 2.6 million tonnes to 2.14 million tonnes at end-March.
“If this trend continues, we can expect to see the inventory level coming down further to about 1.8 million and this, coupled with strong demand from India, Pakistan and Bangladesh, ahead of Ramadhan and festive seasons, would be a boost to prices.
“As demand starts to pick up and production comes down a little, we can expect CPO prices to rise to about RM2,600 per tonne” he told reporters after the company’s inaugural annual general meeting here yesterday.
Al-Hadharah REIT has 12 oil palm plantations and three palm oil mills with a combined area of 20,000 hectares.
Lodin said the company was always on the lookout to acquire revenue generating plantation estates within Malaysia to be injected into Al-Hadharah REIT.
For the financial year ended December 31, 2012, the company recorded a profit after tax of RM92 million while earnings during the year was impacted due to lower CPO prices. — Bernama