Palm oil prices expected to remain above 4,750 ringgit in November, MPOC says
18/11/2024 (Reuters), Kuala Lumpur - Palm oil prices are expected to remain above 4,750 ringgit in November, supported by export supply uncertainties and rising soft oil prices, state agency Malaysian Palm Oil Council (MPOC) said on Monday.
MPOC said palm oil demand is anticipated to remain stable in November despite rising prices, driven by the upcoming Chinese New Year and Ramadan celebrations.
"Thailand’s recent export ban on crude palm oil exports until 2025 has further tightened supply. India imported approximately 800,000 tonnes of crude palm oil from Thailand in 2023 and will now need to source these imports from Malaysia and Indonesia for the remainder of 2024," it said in a statement.
MPOC said in Europe, vegetable oil prices surged in October, with sunflower oil leading with a 12% increase from September, while palm oil followed closely with a 9% increase, and rapeseed oil and soybean oil rose by 7% and 3%, respectively.
"Although soybean oil’s price increase lagged behind, it still reached an 11-month high, while sunflower oil hit a 22-month high. This trend has narrowed palm oil price premium over sunflower oil," it said.
It added that sunflower oil prices are expected to trend higher due to significantly reduced production.
"The rise in soft oil prices will continue to support the elevated palm oil prices, indicating a tightening vegetable oil supply across the market," MPOC said.
MPOC added that the current dynamics of palm oil prices are largely driven by expected export constraints in Indonesia for 2025, adding that both Malaysia and Indonesia are forecasted to end 2024 with low stocks and production is expected to remain stagnant in 2025.
"As a result, major importers are increasing their imports in the near term ahead of Indonesia’s B40 implementation in January 2025," it said.
However, MPOC highlighted that weak energy markets, improving soybean planting conditions in South America, and uncertainty over U.S. biofuel policy under the incoming Trump administration could create bearish sentiment for soybeans and soybean oil, potentially tempering the price rally.