MARC sees a slightly positive price trend on Malaysian palm oil going into 2024, with CPO futures at RM3,700-RM4,100/tonne

RBD Palm Oil
Market & Price Trends
Published Dec 1, 2023

Tridge summary

MARC Ratings predicts a "slightly positive" price trend for palm oil until 2024, with crude palm oil futures projected at RM3,700 to RM4,100 per tonne. Factors such as seasonal production trends, hotter climate conditions, higher demand for biofuels, and the impact of El Niño on palm oil and soybean oil production are expected to drive up prices. However, downside risks include lower demand from India and China, Indonesia's export restrictions being loosened, favorable weather conditions, and higher production of edible oils.
Disclaimer: The above summary was generated by a state-of-the-art LLM model and is intended for informational purposes only. It is recommended that readers refer to the original article for more context.

Original content

KUALA LUMPUR (Nov 30): Seasonal production trends, hotter climate conditions and higher demand for biofuels are expected to exert upward pressure on palm oil prices, MARC said in a statement. "In the near term, supply constraints are expected to drive up palm oil prices. Typically, palm oil production declines after peaking in September or October, with the first quarter of the year having the lowest output. This seasonal trend of lower production will reduce palm oil inventories, exerting upward pressure on prices, especially in 1Q2024. "Furthermore, El Niño’s hotter and drier weather conditions in Southeast Asia have impacted Indonesia, the largest palm oil producer. With El Niño’s impact on palm oil production typically seen at least a year later, production is expected to be reduced in 2H2024. Additionally, in the major palm oil–producing countries Malaysia and Indonesia (83% of global production as at Nov-2023), a stagnation in oil palm plantation area growth, shrinking ...
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