KUALA LUMPUR – Malaysia’s crude palm oil (CPO) exports are expected to see a moderate recovery, with the CPO production reaching 19.6 million metric tonnes (MT) for 2021 compared with 19.14 million MT last year, the Malaysian Palm Oil Council (MPOC) said.
Chief executive officer Datuk Wan Zawawi Wan Ismail said the price forecast is based on uncertainties pertaining to the Covid-19 pandemic recovery, political situation and stimulus packages introduced.
“We forecast the average CPO price to be at RM3,846 per tonne for the first quarter and second quarter of 2021, ranging from a low of RM3,502 per tonne to a high of RM4,190 per tonne,” he said at the virtual Palm Oil Internet Seminar today.
He said palm oil exports are also expected to increase marginally from 17.39 million MT in 2020 to 17.5 million MT this year.
“China, India, the European Union, Asean, Saudi Arabia, Africa, and the United States will be the major export destinations for Malaysia,” he said.
In March, Wan Zawawi said the delivery price for CPO already exceeded RM4,100 per tonne despite the reinstatement of CPO export duties, and the prices are expected to remain firm as concerns of supply limitations due to heavy rains in January and February will impact production.
“This supply and demand scenario is likely to create low month-ending stocks for much of 2021, whereby the monthly-ending stocks will likely trend below 15 million MT, while the 2021 stock usage ratio of 6.38% is lower than that of 2020,” he said, adding that this scenario points to higher CPO prices in 2021.
On global forecast, he said the oils and fats production will register 241.8 million MT production this year, an increase of approximately 2%, and consumption is likely to register 241.47 million MT.
“We anticipate that 2021 will see a continuous recovery both in the global economy and oils and fats prices as there will be production growth recovery among all types of oils and fats while demand will also continue to increase in tandem,” he said.
On global oils and fats production, he noted that it would again be led by palm oil which will play a crucial role in the global supply of oils and fats.
“As the two top palm oil producing countries contributing to 85% of the global palm oil production, Malaysia and Indonesia will be the focus of the international oils and fats trade,” he said.
Wan Zawawi said the role played by both countries were vital in forecasting palm oil price, with 30% of the global oils and fats production coming from Malaysia and Indonesia. – Bernama, April 5, 2021
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