el nino


Palm oil prices to remain steady in 2019: MPOC

KUALA LUMPUR: Malaysian palm oil prices are set to hold steady in 2019 at an average of RM2,303 a tonne, according to estimates by the Malaysian Palm Oil Council (MPOC), while global output of the tropical oil is expected to rise by 3 million tonnes.

“Global palm oil production is projected to be 72 million tonnes, with Malaysia and Indonesia as leading producers,“ the MPOC said in an online conference presentation today.

Rising production could cap recent price gains for palm oil, which has been recovering after touching a 3-year low last November at RM1,940 a tonne.

Benchmark palm oil was trading at RM2,281 a tonne today. The tropical oil averaged RM2,308 last year, according to Refinitiv Eikon data.

MPOC, Malaysia’s key marketing agency for palm oil, also estimated that Malaysian output would rise to 20.2 million tonnes in 2019 and pegged Indonesian production at 42.8 million tonnes.

Malaysia produced 19.5 million tonnes of palm oil last year, while Indonesia’s 2018 output stood at 42 million tonnes, based on estimates by the Indonesia Palm Oil Association.

Malaysian palm oil output is expected to rise as newly replanted areas start to mature, but the increase will be marginal due to ageing trees and a possible El Nino in 2019 that will curb production, the MPOC said in its presentation.

“Indonesian production is forecast to reach a record high of 42.8 million tonnes in 2019 due to improving weather conditions as well as newly maturing areas,“ it added.

Palm oil exports in 2019 are also expected to increase in 2019, in line with an expected rise in demand from key importer India due to its declining domestic oilseed production.

“India is expected to increase its (vegetable oil) imports by 500,000 tonnes, reaching 15.15 million tonnes, out of which palm oil will account about 10 million tonnes,“ said the MPOC presentation.

Industry regulator the Malaysian Palm Oil Board forecast Malaysia’s a slight rise in production to 20.3 million tonnes this year due to favourable weather conditions and an expansion in oil palm matured area, according to an online presentation.

It estimated Malaysia’s 2019 exports at 17.2 million tonnes, up from 16.5 million tonnes last year, due to “expected stronger palm oil demand from major markets.”

Cautiously optimistic on IJM Plantation prospects — Kenanga

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Mixed outlook for CPO prices next year

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Malaysia’s CPO production to continue improving in 2H18

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RAM sees CPO prices at RM2,200-2,400 in second half

PETALING JAYA: RAM Ratings expects crude palm oil (CPO) prices to be sustained between RM2,200 and RM2,400 per metric ton (MT) in the second half of the year, on the back of demand support from biodiesel and the possibility that domestic production growth may not be as strong as anticipated.

“The increase in Indian import duties on rival soybean oil (SBO) in June 2018 is also expected to reverse the downtrend in palm oil exports for Malaysia and Indonesia,” it said in a statement today.

CPO prices averaged RM2,421 per MT in the first half of 2018 (H1’18) , coming in at the lower end of the rating agency’s forecasted band of RM2,400-RM2,600 per MT.

“Prices have dipped to about RM2,100/MT of late amid soft demand, the pick-up in CPO output and concerns over the trade war between the US and China.”

For the full year of 2018, CPO prices are projected to be at the lower end of its projection of RM2,300 to RM2,500 per MT.

RAM said after four months of growth, Malaysia’s CPO output contracted in May and June, likely attributable to slower productivity during the fasting month and Hari Raya holidays.

Overall local production was up 2% to 8.92 million MT in H1’18 and this modest pace is likely to continue through the rest of the year. Indonesia retained its strong growth trend, with output rising 24% year-on-year (y-o-y) to 18.37 million MT in the first five months of 2018.

On the demand front, the rating agency said Malaysia’s export performance declined in May and June, weighed down by the steep hike in Indian import duties on palm products effective March 1 and Malaysia’s reinstatement of export taxes on CPO in May.

“Even so, overall exports still went up 5% y-o-y in H1’18. Elsewhere, Indonesian exports of palm oil slipped 6% y-o-y in the first five months of 2018 amid weaker demand from India and the European Union. The increase in India’s import duties on soft oils – including SBO – effective June 14 is expected to reverse the downtrend in exports for both countries.”

As at end-June 2018, the level of Malaysian palm oil inventory stood at 2.19 million MT, a huge jump of 43% from a year earlier following the El Nino weather phenomenon.

The US Department of Agriculture expects global supply of vegetable oils to advance 5% in 2017/2018, and 3% in 2018/2019. Production of SBO is estimated to rise a respective 3% and 4%, posing stiff competition within the global market for vegetable oils.

On a brighter note, the recent large price premium of over US$200/MT for SBO against CPO may encourage a switch to the latter.

Malaysia palm output seen at record as growers weigh wage hike


KUALA LUMPUR (June 14): Palm oil production in Malaysia is set to climb to a record this year as rain boosts yields, according to a growers’ group in the world’s second-largest producer. Output may rise to between 20.5 million and 21 million metric tons from 19.9 million tons last year, said Nageeb Wahab, chief executive of the Malaysian Palm Oil Association. The group, which includes Sime Darby Plantation Bhd, IOI Corp and Kuala Lumpur Kepong Bhd, represents about 40% of the 5.8 million hectares (14 million acres) of oil palmRead More

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Crude Palm Oil Weekly Report – March 31, 2018

Malaysian palm oil futures edged down this week due to ringgit strengthen further and elevated inventory levels after a dry weather El Nino phenomenon as well higher expectation of production. The benchmark crude palm oil futures (FCPO) contract fell 0.04 per cent to RM2,425 on Friday, which was RM8 higher than RM2,426 during the previous […]