Malaysian Palm Oil Council Russia's Post

Palm Oil Prices Weaken Again in September; Further Decline Likely

Fitch Ratings-Singapore/Jakarta-27 September 2023: Fitch Ratings expects Malaysian benchmark crude palm oil (CPO) spot prices to weaken further over the next three to four quarters, after dropping again to below USD800 per tonne (t) in September 2023. Palm oil output has risen significantly this year, and we expect it to improve further before a potentially strong El Nino starts to affect output in late-2024. The global supply of other vegetable oils should also improve during this period.

Weather forecasters estimate a high likelihood of at least a “Strong” El Nino weather persisting until March 2024. Previous episodes of the weather pattern, which causes drier weather in Indonesia and Malaysia, have usually lasted for a year or more. Therefore, we see the risk of a strong El Nino persisting until at least end-2024.

Weather forecasts in the next few months should lend better visibility into 2H24 and beyond, and may brighten the CPO price outlook for 2024-2025. We currently assume USD600/t for 2024, and USD650/t thereafter
By: via Malaysian Palm Oil Council Russia