Crude palm oil prices have inched upwards of late.
This is due to rising global demand and a drop in inventories, creating a buzz around plantation stocks again.
Some analysts are bullish about the prices, even though stock prices have fallen in the past few months.
Industry watchers are hoping that market confidence will do the rest to push up the prices further, so that there can be a V-shaped recovery.
Demand is expected to stay strong because of festivities in China and India which would use palm oil resources.
This demand will cause inventories to fall and push up prices.
Other factors accounting for palm oil price increase include the weakening US dollar and rise in crude oil prices.
When crude oil prices are up, there is motivation to switch to biofuels.
Jayasankaran, S, “Rising Palm Oil Prices Kindle interest in Plantation stocks” dated 14 April 2009 in the Business Times (Singapore: Business Times), p. 24.