KUCHING: The plantation sector’s crude palm oil (CPO) production has been projected by analysts to likely peak in either October or November. From the research arm of Kenanga Investment Bank Bhd’s (Kenanga Research) channel checks with planters, it gathered that the adverse effect of El Nino and La Nina has largely subsided. “Therefore, production is […]
KUCHING: A possible return of the El Nino cycle towards the year end could impact planters going into 2019. According to the resarch arm of Affin Hwang Investment Bank Bhd (AffinHwang Capital), El Nino could make an appearance towards year-end based on statistics from the US National Oceanic andf Atmospheric Administration (NOAA) in its climate […]
KUCHING: Malaysia’s crude palm oil (CPO) production has been forecast by analysts to continue improving in the second half of 2018 (2H18), but at a lower growth rate. The Malaysian Palm Oil Board’s latest statistics revealed that Malaysia’s CPO production for 1H18 had amounted to 8.92 million MT, up from 8.72 million MT in the […]
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.
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
KUCHING: The China-US tariff continues as China has hit back at the US’s proposition to impose $US50 billion in levies on Chinese goods with a plan to impose a 25 per cent duty on US agriculture produce that include wheat, corn, cotton, tobacco, beef and soybeans. Local analysts said should this Chinese tariff on American […]
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 […]
KUALA LUMPUR (March 6): Palm oil’s price direction will be influenced by weather in North and South America and its impact on soybean production, according to Ling Ah Hong, director of GanlingConsult Malaysia. * If drought in Argentina spreads to the U.S., affecting soybean planting, palm oil may see a less bearish scenario this year, Ling says in interview in Kuala Lumpur * Palm prices seen averaging -13% y/y at RM2,400/ton this year if dry weather only affects Argentina, may collapse to RM2,200 in 2H as production in top palmRead More
KUALA LUMPUR, March 5 — A push by palm oil producers to cultivate new markets in South-east Asia and the Middle East is unlikely to move the dial on exports this year, traders and analysts say, as customers favour cheaper rival oils while…
KUALA LUMPUR, March 5 — Palm oil output in top producers Indonesia and Malaysia will likely decline in the first quarter of the year, in line with seasonal trends as rains disrupt harvests, but will rise after mid-year to projected record highs,…