MPOB expects CPO to trade at RM4,000 to RM4,200 this year
PUTRAJAYA: Crude palm oil (CPO) price is expected to hover between RM4,000 and RM4,200 per tonne this year from RM5,087.50 last year, with issues such as labour availability and Indonesian production being the key factors.
“Although the labour situation is expected to improve this year, concerns remain,” said Malaysian Palm Oil Board director-general Datuk Dr Ahmad Parveez Ghulam Kadir during his presentation at the Palm Oil Economic Review and Outlook Seminar 2023 yesterday.
He said although the temporary suspension of intake was lifted early last year, the inflow of foreign workers had been slower than expected.
“In the first half of last year, the labour crunch issue continued to take a toll on production. The situation only improved slightly in the second half.”
He said the Malaysian Palm Oil Association had estimated about RM20 billion revenue losses due to the shortage of workers last year.
The country’s CPO production rose marginally to 18.45 million tonnes last year from 18.12 million tonnes in 2021.
The highest production was recorded in October at 1.81 million tonnes and the lowest in February at 1.14 million tonnes.
He said fresh fruit bunches yield stood at 15.49 tonnes per hectare last year, higher than 15.47 tonnes recorded in the previous year.
For the year, the highest CPO price was in May at RM6,873 per tonne while the lowest was RM3,682 in October.
Meanwhile, he said Indonesia had tightened its export policy to ensure more supply for domestic use.
“Effective Feb 1, Indonesia will also impose a higher biodiesel blending mandate of B35 from B30 previously.
This policy was expected to further restrict global CPO supply, he added.
“Hence, demand for Malaysian palm oil is expected to rise and assist in reducing the domestic CPO stockpile.”
MPOB expected palm oil exports to rise 3.7 per cent to 16.3 million tonnes this year from 15.72 million tonnes last year, said Ahmad Parveez.
“Production is estimated to rise by three per cent to 19 million tonnes this year from 18.45 million tonnes last year.”
Malaysia’s palm oil stock is forecast to decline 8.7 per cent to two million tonnes this year from 2.19 million tonnes last year on higher export demand.
He added that concerns over soyabean supply due to the dry weather patterns in Argentina and southern Brazil could also influence the CPO price.