KUALA LUMPUR: (March 7) Crude palm oil (CPO) three-month futures are expected to trade below the RM2,650 level and to weaken to the RM2,200 range in the next five to six months, according to Transgraph Consulting Pvt Ltd founder, chairman and managing director Nagaraj Meda.

Nagaraj projected the greenback would appreciate on the back of an anticipated increase in US interest rates this year, pushing the ringgit towards 4.00 against the American currency (from about 3.90 at present). In turn, this would pressure palm oil prices, he explained in a panel session at the 29th Palm and Lauric Oils Conference and Exhibition (POC).

Meanwhile, Palm Oil Analytics owner and co-founder Sathia Varqa highlighted a few areas to monitor closely. These include the Indian government's consideration on import tariffs, the loss of soybean crops in Argentina, and Malaysia not extending its suspension of an export tax on palm oil.

"I do not think that the import tariff increase warrants a structural shift in CPO prices to linger at low levels," said Sathia who anticipates CPO prices rising to RM2,600 per tonne by June and for CPO prices to average between RM2,500 and RM2,600. Palm oil production is projected to rise 3% to 20.5 million tonnes.