Malaysia’s crude palm oil price for 2022 projected to be 15.7 percent higher on year
31/12/2022 (Hellenic Shipping News) - Malaysian Palm Oil Board (MPOB) has on Friday projected the crude palm oil (CPO) prices to average at 5,100 ringgit (1,157 U.S. dollars) per tonne this year.
Its director-general Ahmad Parveez Ghulam Kadir said in a statement that the prices are 15.7 percent higher compared to 4,407 ringgit (1,000 U.S. dollars) per tonne in 2021.
According to MPOB, the average price of CPO for January to November 2022 was 5,167 ringgit (1,173 U.S. dollars) per tonne, an increase of 18.4 percent compared to 4,363 ringgit (990 U.S. dollars) per tonne for the same period in 2021.
Parveez said several factors may contribute to the expected better performance, especially a stronger demand for palm oil.
He said the ongoing Russia-Ukraine conflict has disrupted the sunflower oil supply chain globally, causing a surge in the demand for palm oil as a replacement for sunflower oil.
Rising prices of soybean oil and Brent crude oil in the world market are also contributing factors that may impact the performance of Malaysian palm oil, he added.
“We foresee the price of CPO to stabilize and average at 3,800 ringgit (862.6 U.S. dollars) a tonne in 2023,” said Parveez.
According to him, this is in anticipation of higher palm oil production, weather conditions which are expected to improve especially in the second half of next year and expected higher availability of supply of other major vegetable oils.
He noted that soybean oil prices which are expected to be low due to the high production in Brazil and the United States may also impact the price of CPO.
Additionally, he said the strengthening of the Malaysian ringgit against the U.S. dollar may also affect the price of the CPO.
Meanwhile, Parveez expects CPO production to increase slightly by 2.1 percent to 18.50 million tonnes for this year as compared to 18.12 million tonnes in 2021.
He expects a slow recovery of palm oil production due to the issue of labor shortage in the oil palm plantations, especially for fresh fruit bunches (FFB) harvesting and unloading activities.
CPO production is also projected to further increase to 19 million tonnes for 2023 due to the expected increase in the productive areas.
According to MPOB, CPO production for January to November 2022 stood at 16.83 million tonnes, an increase of 1 percent compared to 16.67 million tonnes achieved in the same period of 2021.
This was attributed to an increase of 2.8 percent in processed FFB to 86.51 million tonnes during the period from January to November 2022 compared to 84.17 million tonnes in the same period last year.
In anticipation of higher production, Parveez expects the closing stocks of palm oil in 2022 to be at 1.85 million tonnes, up by 240,000 tonnes or 14.9 percent compared to 1.61 million tonnes in December 2021.
According to him, closing stocks of palm oil are projected to be 2 million tonnes in 2023, higher than that in 2022 due to the expected higher supplies of other major vegetable oils.
“Generally, we expect the performance of the Malaysian palm oil industry to be better next year than that of 2022,” said Praveez.
According to MPOB, exports of palm oil and other palm-based products for January-November period increased by 1.3 percent to 22.43 million tonnes compared to 22.14 million tonnes in the same period of 2021.
The higher price of palm oil during that period boosted total export revenue by 31.8 percent to 120.43 billion ringgit (27.34 billion U.S. dollars) from 91.38 billion ringgit (20.74 billion U.S. dollars) in January to November 2021.
Exports of palm oil alone rose slightly by 0.8 percent to 14.25 million tonnes in January-November compared to 14.14 million tonnes in the previous corresponding period.
As such, palm oil export revenue surged 31 percent to 80.22 billion ringgit (18.21 billion U.S. dollars) from 61.26 billion ringgit (13.9 billion U.S. dollars) in the same period of 2021.
Source: Xinhua