Malaysian palm oil has fallen for six consecutive sessions, with futures hitting a 3-week low yesterday ahead of July production and export data. Experts believe that importers have built up enough stocks to allow Malaysia to reduce shipments in August after strong exports in June and July.
In July, palm oil exports from Malaysia rose 7.8% from June, according to surveyor AmSpec Agri Malaysia, and 14% according to Intertek Testing Services (ITS).
September palm oil futures on Bursa Malaysia fell 0.23% to 3,872 ringgit/tonne, or $855/tonne, on Tuesday, losing 7.2% for the week.
The Malaysian Palm Oil Board (PBOB), a state agency, said crude palm oil prices in Malaysia will be 3,700-4,200 ringgit/t in the second half of 2023, which will be supportive in the long term. However, there is a possibility that prices could rise to RM4,300/t or $952/t and above before 2024 due to uncertainty over Black Sea sunflower oil supply and lower-than-expected palm oil production in Malaysia.
In the first half of 2023, palm oil production in Malaysia (the world’s second largest producer) fell by almost 3% compared to the same period in 2022.
By December 2023, the world’s biggest buyers, India and China, will import a combined 16.5 million tonnes of palm oil, up from 15 million tonnes in 2022.
“There will be increased demand for palm oil in the ASEAN and MENA regions due to its competitive price and the shortage of domestic production,” MROS experts predict.
The supply of sunflower oil from Ukraine to Asian countries is limited due to the blockade of ports, which is helping to boost palm oil sales.
Source: Graintrade