HLIB: Will likely surpass its 2022 to 2024 projections of RM4,300, RM3,300, RM3,300 per tonne respectively.
CPO prices are forecast to remain elevated due to palm supply disruption in Malaysia as well as output uncertainties on major oilseeds (such as soybean, corn and sunflower seed) arising from the Russia – Ukraine conflict and drought in South America.
“Also, the Indonesian government’s recent move to raise domestic market obligation (DMO) to 30% will further tighten supply of vegetable oil in the export market”.
Although the Malaysian Palm Oil Board projects CPO output in Malaysia to improve by 4.9% to 19 million tonnes in 2022, this depends on timely arrival of foreign workers into Malaysian shores and sufficient fertiliser application.
A prolonged conflict between Russia and Ukraine will impact supply of fertilisers (hence impacting vegetable oil output), given Russia’s leading position in the world’s supply of fertiliser and related raw materials such as urea, ammonium nitrate and potash.
The cost pressures will be more apparent in the second half of 2022 once growers fully exhaust the cheaper fertiliser supplies purchased from last year.
Source: The Star
https://www.thestar.com.my/business/bus ... -near-term
