Malaysian Palm Oil Council Russia's Post

Palm oil to trade below 3,500 rgt in 2023, says LMC International

KUALA LUMPUR, Oct 13 (Reuters) - Malaysia's palm oil price is forecast to trade between 3,200-3,500 ringgit a tonne next year as stocks in the world's second-largest producer rise, commodities consultancy LMC International said on Thursday.

"Weak supply starting in 2019 pushed up prices, the cycle is correcting," Julian McGill, head of South East Asia at LMC International, said at a conference.

Benchmark crude palm oil prices FCPOc3 hit a record high of 7,268 ringgit ($1,552.99) in March due to a global edible oil shortage, triggered by the war in Ukraine and export curbs in Indonesia.

But prices have since plunged by nearly half after Indonesia, the world's largest producer, removed a restriction on exports and waived export levies to accelerate shipments.

Jakarta is considering extending the export levy waiver on palm oil until year-end, which may draw demand away from smaller rival Malaysia and pressure prices.

"A surge in exports from Indonesia, as the crop recovers and the bottlenecks are removed, is causing Malaysian stocks to rise," said McGill, adding that inventories were being pulled up to near 3 million tonnes.

Prices will continue to decline to around 3,200 ringgit in the first quarter of 2023, and remain below 3,500 ringgit into the second half of that year, McGill said.

There was mixed evidence on demand destruction, and palm oil exports from Indonesia and Malaysia, which constitutes around 85% of global palm oil exports, were lower than 2019, he said.

($1 = 4.6850 ringgit)
By: via Malaysian Palm Oil Council Russia