MPOC said the intensifying US-China trade tensions, and a build up in global soybean stocks would also drive the price movement.
KUALA LUMPUR: The Malaysian Palm Oil Council (MPOC) expects palm oil prices to remain steady above RM4,400 per tonne towards the end of this year, amid weak crude oil prices and high vegetable oil inventories in major consuming markets such as China and India.
MPOC said the intensifying US-China trade tensions, and a build up in global soybean stocks would also drive the price movement.
Meanwhile, it said vegetable oil prices are anticipated to remain firm through the remainder of this year, supported by strength in palm and soybean oil.
“Diminishing exportable soybean oil supplies from Argentina are likely to lift prices in the coming months, while ongoing speculation over Indonesia’s B50 biofuel mandate will continue to lend support to palm oil,” the council said in a statement.
MPOC said palm oil is once again traded at a premium to soyabean oil in the global market, with prices as of mid-October standing at US$42 a tonne higher in Europe and US$26 a tonne higher in India, reversing the brief discount period seen between April and September.
Meanwhile, Malaysia’s palm oil exports rose by 102,000 tonnes, or 7.7% month-on-month (m-o-m), to 1.42 million tonnes in September, with most regions recording gains except the European Union and Asia Pacific.
The council said the largest improvement came from South Asia, where exports to India reached 312,000 tonnes, the highest in 11 months, while shipments to Sub-Saharan Africa, the Middle East and North Africa, the Americas and Central Asia also increased during the month.
“Palm oil stocks in September climbed to 2.36 million tonnes, the highest in 22 months, even though export growth outpaced production.
“The increase was largely driven by domestic consumption normalising to its usual range of between 300,000 tonnes per month and 350,000 tonnes per month, after reaching a record monthly high of 499,000 tonnes in August,” the council said.
It said imports also rose by 20,000 tonnes or 33.9% m-o-m, further contributing to the stock buildup. — Bernama
