CPO, crude oil decoupled, but not for long, says LMC chief

The weaker demand for crude palm oil (CPO) amid the global economic crisis has decoupled the commodity from crude oil, but that would not last for long, said chairman of LMC International Dr James Fry.
"Vegetable oil prices will only be decoupled from the oil price for a short period, but it is not sustainable. The prices of the two commodities will be coupled again in the future when the market corrects," he added.
Recent news reports suggested that the current price movements' pattern in CPO futures and crude oil was an indication that the two commodities were decoupling.
Speaking to reporters on the sidelines of a palm and lauric oils conference here yesterday, he said the CPO sector outlook was bleak as the world had been in the worst recession for a long time.
"The outlook and vegetable oil demand is expected to remain weak in the next six months. The demand globally is almost flat and the only demand will come from the biofuel sector, but Malaysia needs to take time to create a new biodiesel system for use," he said