PETALING JAYA: With sentiment turning increasingly positive, crude palm oil (CPO) is on its way to reaching the initial price target of RM3,000 per tonne before the end of 2020, as forecast last year, says the Malaysian Palm Oil Board (MPOB).
Director-general Dr Ahmad Parveez Ghulam Kadir said the demand for the commodity is slowly recovering, although it has not reached pre-Covid-19 levels.
Factors that contribute to the positive sentiment, he said, included the implementation of the B20 biodiesel programme, encouraging export figures, lower production and inventory, and new potential markets.
“Last year, we set a target for CPO to reach RM3,000 per tonne in 2020, with an average price of RM2,750 for 2020, but then we were hit by the pandemic that disrupted the whole supply chain, and it forced us to revise our average price to RM2,500 per tonne.
“However at the current level of RM2,950 per tonne as at Tuesday’s closing (physical price), we are catching up even faster than we thought, so it’s just a matter of time, ” he said.
Data on exports of palm oil by destination shared on the MPOB website showed that from January to July 2020, Malaysia’s CPO exports worldwide stood at 9.57 million tonnes versus 10.88 million tonnes in the same period in 2019.Exports to India declined to 852,450 tonnes for the period from 3.04 million tonnes last year due to, among others, the temporary shutdown of the hotel, restaurant and café industry. Exports to the EU slipped to 1.18 million tonnes from 1.27 million tonnes, but exports to China increased to 1.54 million tonnes from 1.09 million tonnes. — Bernama
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