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 The Star Online
 Palm prices seen firm until February

The Star Online (27/09/2021) - PANAJI: Malaysian crude palm oil prices, which have hovered near last month’s record highs, will stay firm until February, but start to ease from March, on rising output in the top two producer nations, leading industry analyst Dorab Mistry said.

Benchmark crude palm prices have jumped nearly a quarter this year, rallying for a third consecutive year as a pandemic-induced labour shortage crimped output in Malaysia, the world’s second largest producer.

The contract touched a record of RM4,560 a tonne in mid-August, but the high prices have hurt demand in price sensitive markets, such as India, the world’s top buyer of edible oils.

Mistry, the director of Indian consumer goods company Godrej International, unveiled a bullish outlook for the next five months, because of Indonesia’s high export levy and a peak in supply tightness expected at the start of 2022.

He pegged palm oil prices in a range from RM4,000 to RM4,400 during October to February before they ease in March.

“High prices (will) finally end from April 2022,” Mistry said at the Globoil India conference in the resort state of Goa.

He forecast prices to decline from RM3,800 to RM3,200 during April to September, underpinned by Indonesia’s biodiesel mandate and export levy.

“Palm oil production in Malaysia will only recover post-Ramadan in 2022,” Mistry said. The Muslim holy month is expected to begin around April 2.

Mistry lowered his 2021 estimates for Malaysia’s production to 18.2 million tonnes. Production next year is likely to rise to 19.2 million tonnes if the government alleviated the acute labour crunch, he said.

Output in Indonesia, the world’s largest producer, will rise in 2022 by at least one million tonnes from 2021, he added.

World palm oil supply is seen rising by 2.5 million tonnes in the 2021/22 season, up from an increase of one million in the previous season as demand for food and fuel grows, Mistry said. ― Reuters

Read more at https://www.thestar.com.my/business/business-news/2021/09/27/palm-prices-seen-firm-until-february

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