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FGV's expected to increase palm oil price to RM2250/tonne

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FGV's expected to increase palm oil price to RM2250/tonne M'sia News

Crude palm oil futures traded in Malaysia will likely average RM2,250 a tonne next year, says in-terim CEO 
FGV Holdings Bhd, one of the world's biggest producers of palm oil, is raising its price outlook for next year in a sign that industry players are turning more optimistic despite the market languishing near the lowest levels in three years. 
Crude palm oil futures traded in Malaysia would likely average RM2,250 a tonne next year, said chairman and interim chief executive officer Datuk Azhar Abdul Hamid in an interview, here. That's higher from his forecast last month of RM1,900 to RM2,l00 and 10 per cent higher than Thursday's closing price.
FGV isn't alone with its bullish views.
Lender CIMB projects prices to average RM2,400 a tonne next year, four per cent higher than this year's average. 
Higher biodiesel mandates in top palm producers Indonesia and Malaysia are raising hopes that demand for the edible oil will increase, helping to absorb a glut that had pushed prices 18 per cent lower this year.
Speculation on record palm oil stockpiles in Malaysia signals that the market has bottomed and poised for a rebound is adding to the confidence. 
This year hasn't been good for FGV. The stock is Malaysia's worst per-former this year, plunging 61 per cent to 66 sen a share, as the company grappled with a management overhaul and multiple investigations into previous deals. 
The price slide has created a buying opportunity, said Azhar, who has nearly doubled his own holdings in the past month to 644,500 shares. 
The focus would be on improving cash flow, said Azhar.He targets RM50 million a month of free cashflow from the plantation division in the next one to two years, from a "negligible" amount currently.

RM849.3 million net loss in the third quarter due to asset impairments."There are nascent signs of operational recovery," said the company in a November 28 statement. 

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