W13: Weekly Palm Oil Update

Published 2023년 4월 3일

Global

After rising 7.67% over the previous four sessions, the price of the June 2023 delivery contract for palm oil on the Bursa Malaysia exchange opened marginally lower at 3,751 ringgit (USD 851.34/MT), down 0.98%. This futures contract was closed at 3,723 ringgit (USD 845.18/MT) at the mid-day break. This contract is on a monthly decline but has increased for the entire W13. Analysts predict a decrease in Malaysia's palm oil production after the Milling Mills Association predicted a decrease of 22.9% from March 1-25.

Palm Oil Industry Faces 3-5 Years Production Halt Due to Replanting Curbs

The expansion of palm oil appears less promising in the long run. Due to stricter regulations, growth in the form of new oil palm cultivation is slowing. It was stated that Malaysia's oil palm acreage has been shrinking even before reaching a voluntary cap of 6.5M hectares, while Indonesia, which has 15M hectares of oil palm trees, has just three to four million ha left for the crop.

Europe

The European Union Is Discriminatory, Indonesian Palm Oil Farmers Protest

A protest against the EUDR, or Anti-Deforestation Law, was organised by numerous palm oil farmers. On Wednesday, March 29, 2023, a demonstration was held in front of Menara Astra in Jakarta, which housed the office of the European Union Mission. The general chairman of the Indonesian Palm Oil Farmers Association (APKASINDO) Gulat Manurung, complained that farmers are being treated unfairly by the existence of the Anti-Deforestation Law.

Indonesia

January 2023 Palm Oil Industry Performance in Indonesia

3.89MMT of CPO and 370,000MT of PKO are produced in January 2023, which is about equivalent to January 2022's 3.86MMT and 365,000MT of PKO. Due to seasonal reasons, January 2023 CPO output was about 9.5% lower than December 2022 CPO production of 4.3MMT.

Malaysia

Malaysia Wants Palm Oil Hubs in Egypt, Saudi Arabia

Malaysia intends to increase palm oil exports by setting up new export hubs in Egypt and Saudi Arabia for the Middle East and African markets. The Malaysian Palm Oil Council (MPOC), whose re-exports of the oil have recently increased, is making an effort to expand into emerging markets. After Indonesia, Malaysia is the second-largest exporter of palm oil worldwide. China, the Philippines, and India are among its main importers.

Malaysian Palm Oil Surges for Fourth Day on Output Concerns and Firm Rival Oils

On March 30, Malaysian palm oil futures rose for a fourth straight session, reaching a more than one-week high, supported by stable rival edible oils and forecasts of lower production. On the Bursa Malaysia Derivatives Exchange, the benchmark FCPOc3 palm oil contract for June delivery increased by 84 ringgit, or 2.27%, to 3,791 ringgit (USD 857.69/MT).

Malaysia Plans to Increase Palm Oil Exports to the Middle East and Africa

By building new export hubs in Egypt and Saudi Arabia, Malaysia intends to expand the amount of palm oil it exports to the Middle East and African markets. several different techniques. First of all, Malaysia is expanding into new markets while also fostering ties with all of our nearby nations. According to the Deputy Prime Minister, a meeting was recently held with the Egyptian Ambassador to Malaysia.

Malaysian Palm Oil Climbs for Third Day to One-Week Peak on Output Worries

On March 29, Malaysian palm futures reversed early gains in anticipation of tighter supply, but the increase was curbed by a study noting the vegetable oil's declining premium relative to other oils. The uncommon price advantage palm oil enjoys over competitors like rapeseed and sunflower oil is expected to slip into a discount once top producer Indonesia eases export curbs after Ramadan.

Malaysian Palm Oil Prices Surge on 2nd Day of Trading, It May Rise Into USD 834.84-853.62/MT

Considering that it has been steady near a support level of USD 790.59, palm oil prices could rise to a range of USD 834.94-853.72/MT. The price of Malaysian palm oil futures increased for a second session on Tuesday, March 28, to over USD 825.89/MT after dropping to a five-month low of below USD 814.57/MT in W12. For the first 25 days of March, the exports of Malaysia's palm oil production increased by between 11.4% and 19.8% MoM.

Malaysian Palm Oil’s Premium to Be Short Lived, to Fade With Indonesian Supply

Following the easing of export restrictions by top producer Indonesia after Ramadan, palm oil's unusual premium over rivals rapeseed and sunflower oil is expected to be short-lived and begin trading at a discount, according to industry professionals. Important importers in Asia, Africa, and Europe have slowed down their orders of palm oil for shipments in April as refiners have begun switching to rapeseed and sunoil, they claimed. Due to increased supplies in Europe and North America, sunflower oil and canola oil costs have decreased by more than USD 250/MT (RM1,100) thus far in 2023.

Malaysian Palm Oil Snaps Seven-Day Decline on Exports Surge

After declining for the previous seven trading days, Malaysian palm oil futures ended higher on Monday, March 27, but gains were limited by weaker rival soyoil. On the Bursa Malaysia Derivatives Exchange, the benchmark palm oil contract for June delivery increased by 65 ringgit, or 1.9%, to 3,577 ringgit (USD 809.46/MT).

Boost in Demand for Malaysian Palm Oil Seen on Supply Recovery

Palm oil consumption is anticipated to rebound as a result of rising demand in the Asia-Pacific region, improved affordability, and improved global biofuel policies. As a result of South America, especially Argentina, reporting a smaller-than-anticipated soybean surplus, the recovery in the market for the supply of edible oil has been muted so far this year. The supply of palm oil should increase in 2023, and prices for crude palm oil (CPO) are expected to hold steady in 2023 and 2024. This is with the exception should palm oil, soy oil and rapeseed oil harvests improve significantly in the latter part of this year. The higher palm oil production of 3% to 5% year-on-year in 2023 should ease oil supply, even if on a limited scale.

CPO Futures Close Higher on March 27 in Anticipation of Weaker Output in Malaysia

The expectation of a weaker output and lower stockpile in the country caused the crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives to end a three-day losing streak and finish higher on Monday (March 27). Domestic palm oil output is expected to fall by 6% between March 1 and 20, according to the Malaysian Palm Oil Association (MPOA), and by 5% to 9% according to UOB. At the close, the spot price for the months of May 2023 and June 2023 each climbed by RM91 to USD 835.84/MT and RM135 to USD 878.83/MT, respectively.

Nigeria

Nigerian Palm Oil Business Profitable

Despite the recent drop in the price of the product, Edo State palm oil traders claim. A 20-liter jerry can of palm oil costs USD 51.67, whereas a barrel costs between USD 516.68 and USD 538.21. Ten litres of the commodity go for USD 25.83, four litres cost USD 11.84, two litres sell for USD 3.44, and one litre goes for USD 0.0074.