Exploring the Anticipated Decrease in CPO Prices for May 2024

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Exploring the Anticipated Decrease in CPO Prices for May 2024. Photo by: Palmoilmagazine.com

PALMOILMAGAZINE, KUALA LUMPUR – Palm oil, previously the primary choice for importing countries, now faces significant pressure from its main competitor, sunflower oil. According to RHB Investment Bank (RHB Investment), this could lead to a shift in product preferences towards other types of oil.

RHB Investment’s analysis indicates that despite importing countries increasing their crude palm oil (CPO) stocks to meet rising demands, its competitive edge remains threatened by sunflower oil, which maintains a price gap of US$ 3/ton, along with CPO facing a smaller price discount compared to soyoil.

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As reported by Astroawani, RHB Investment also forecasts a decrease in palm oil stocks to less than 2 million tons over the next few months, despite CPO reaching its peak at RM 4,285 in March 2024. MIDF Research predicts that the Malaysian palm oil futures (MSM) could drop to below RM 4,000 per ton in the following month, subject to weather conditions.

Also Read: World Geopolitics Benefits Palm Oil

However, MSM spot prices could experience a 4.6% increase to RM 4,410 per ton in April, influenced by El Niño. The anticipated weather recovery towards La Niña in the second half of 2024 may lead to a decrease in CPO prices in May, with expectations around RM 3,946.7 per ton, marking a 10.5% decline.

The changing trend of CPO and sunflower oil price reflects the market dynamics with the weather factors, such as, EL Nino, La Nina, and trade policy in many countries. These play the significant roles to determine the market direction. To face the challenge, product diversification and adaptation would be the keys for palm oil producer countries to keep maintaining their competitiveness in the markets globally. (T2)

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