The Hellenic Shipping (30/12/2020) - Fitch Ratings expects crude palm oil (CPO) prices to decline in 2021 on higher supply and assumes they will average USD560/tonne over the year, despite some upside risk, such as a strong La Nina weather pattern.
There are indications that supply and inventory are picking up in Indonesia, which is the world’s largest CPO producer, and high prices are affecting demand from key constituents, such as Indian imports and Indonesian biodiesel.
Malaysian benchmark CPO spot prices touched USD900/tonne in December 2020 for the first time since 2012 and averaged at around USD810/tonne in 4Q20 to date. This was significantly higher than the USD660/tonne average in 3Q20.
Prices in 2H20 were supported by weak output and low inventory in Malaysia, robust prices and outlook for soybean oil, a close substitute for palm oil, due to market expectations of dry weather affecting supply, and a recent hike in Indonesian palm oil export levies.
Source: Fitch Ratings
Read more at https://www.hellenicshippingnews.com/palm-oil-prices-likely-to-decline-from-multi-year-highs/