PUTRAJAYA, Oct 29 (Bernama)-- IOI Corp Bhd, a fully-integrated upstream and downstream player in the palm oil industry, foresees the crude palm oil (CPO) price increasing in the first quarter of next year to between the RM2,300 and RM2,600 levels.

Executive Chairman Tan Sri Lee Shin Cheng said the current trend was part of the CPO business' nature, with prices fluctuating.

"With the anticipated record high soybean corp harvest in the United States, we expect the CPO price to stay at the current level in the near term, before trending higher towards year-end, when palm oil production enters its seasonal low and Malaysia implements the B7 biodiesel mandate nationwide," he added.

He said given the prevailing low CPO price, the company expects more demand to come from the biodiesel and biofuel sector.

"The US Food and Drug Administration's announcement of an impending ban on trans-fats will also result in higher demand for palm oil imports into the country in the short to medium term," Lee told reporters after the company's annual general meeting here today.

Going forward, he said the group expects a significantly higher contribution from its Indonesian investment, Bumitama Agri Ltd, as more of its young palm trees reach optimum production age.

"We have another company in Indonesia, PT Sawit Nabati Agro, and over the last three years, have planted 16,000 hectares. We expect to have a total of 20,000 hectares of oil palm plantations by year-end and this will help increase earnings in the near term, Lee added.