Photo by : Hendra / Sawitfest 2021
Palmoilmagazine, JAKARTA - In the early days of 2022, vegetable oil price, including (crude) palm oil hit the record. Malaysian Palm Oil Board (MPOB) reported that in January 2022, crude pam oil (CPO) hit the most expensive price in the last ten weeks.
It happened for the supply in December 2021 reduced. CPO contract for March 2022 at Bursa Malaysia Derivatives Exchange increased RM 43 or 0,8% to be RM 5,069 (US$ 1,210.50) per ton as the highest closing since 3 November 2021.
Of course, this is a blessing for planters in Indonesia, including smallholders. But will it remain expensive in 2022?
The production and Covid-19 pandemic are unavoidable challenges. Council of Palm Oil Producing Countries (CPOPC) reported that since Covid-19 pandemic hit in 2020, 75% of 500 thousand foreign workers as harvesters in Malaysia’s palm oil plantation never returned because of restriction in the country. This cut of CPO production in the country.
As the result, , if the workers get smaller in numbers about 5 to 10%, they could be about 15 thousand – 17 thousand workers in every spot. This cut off CPO production in Malaysia up to 1,3 million tons.
In the same time, fertilizers got more expensive. Many smallholders complained about non-subsidy fertilizer in the markets for the past one year. It makes them worried to manage production input costs because fertilizers reach 60% component of total production costs.
It eventually makes them minimize fertilizer application to be more efficient. But other planters got issue in fertilizer because of logistic distribution from Covid-19 pandemic.
CPOPC predicted, the impact of decreasing fertilizer application in 2018 and 2019 would be known in 2021 because the result recovery is slower that it is in general. Palm oil production in Indonesia and Malaysia will be recovered in 2022.