MPOC Optimistic for CPO Price in 2024 to be in the Range of RM4000 per Metric Tons

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CPO tank. Photo by: Palmoilmagazine.com

PALMOILMAGAZINE, PETALING JAYA – In December 2023, palm oil stocks in Malaysia experienced a 4.64% decline, marking the lowest level observed in the past three months. This trend was consistent with palm oil production, which saw an increase in the last quarter of 2023 due to the influence of El Nino.

Malaysia achieved its highest production level since 2018, witnessing a growth of 0.16 million tons from 5.11 million tons to 5.27 million tons compared to the same period in 2022.

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According to the official statement from the Malaysian Palm Oil Council (MPOC), obtained by Palmoilmagazine.com on Monday (15/1/2024), the production surge observed in the fourth quarter of 2023 is expected to extend into the first quarter of 2024.

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Consequently, there is a projection that palm oil production in Malaysia for the entire year of 2024 will increase by only 1%, reaching approximately 18.75 million tons.

The 2024 palm oil price, there is optimism that it would be about RM 4,000. The positive projection happens for the supply and demand dynamic in Indonesia which could be negative after Indonesia implements biodiesel 35 percent (B35) in August 2023.

The deficit production in Indonesia about 0,24 million tons would be the description, domestic consumption combination that increased to be the materials for biodiesel and food, without same increasing production. This would make the deficit bigger if the exports would increase more than the projection.

Meanwhile, according to Oil World, fat and oil production in the globe in 2023/24 could increase 3,46 million tons. The consumption could do too 7,22 million tons. It happens for the biodiesel mandate terms and condition in the United States, Indonesia and Brazil. As the result, fat and oil in the world would get tense in the second semester of 2024.

In soyoil commodity in 2022/23, United States transformed from being net exporter to be net importer. This chance would continue until 2023/24, within net soyoil imports about 22,000 tons compared to the net export that reached 1,14 million tons in 2019/20. (T2)

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