MARKET DEVELOPMENT
Palm Oil Prices to Decline Gradually as Output Rises
Palm Oil Prices to Decline Gradually as Output Rises
30.03.2022 (www.hellenicshippingnews.com) - Fitch Ratings expects higher output over the next year to drive a gradual decline in crude palm oil (CPO) prices, which rose to a record of over USD1,900 per tonne (t) in Malaysia in early March 2022.
The price surge has been driven by uncertainty over supply of sunflower seed oil from Ukraine and Russia, the impact of a drought on South American soybeans and Indonesia’s steps to curb palm oil exports.
However, higher palm oil output in Indonesia is likely to be a significant contributor to better vegetable oil supply in 2022, and we assume an average benchmark price of USD1,000/t in 2022, USD700/t in 2023 and USD600/t thereafter. A prolonged Russia-Ukraine war is a key risk that may keep prices elevated in 2022-2023.
Source: Fitch Ratings