The state agency, the Malaysian Palm Oil Council (MPOC), lowered its production outlook for the world’s second largest producer on Wednesday and set prices to stay above 6,000 ringgits (1,367.37 $) per tonne this year.
MPOC expects Malaysia’s production in 2022 to be 18.6 million tonnes, up from 18.1 million tonnes in 2021, as migrant workers are expected to enter and help ease the labor shortage in plantations.
The world will see increased demand for oils and fats in 2022, and global dependence on palm oil will continue to rise, said Mohd Izham Hassan, Deputy Director of MPOC.
“Exports of oils and fats in 2022 are likely to be close to 97
million metric tons and the share of palm oil could reach 60%,” he added.
World prices for vegetable oils, including palm oil, have hit record highs this year as Russia’s invasion of Ukraine disrupted sunflower oil shipments and export restrictions in the main producer, Indonesia, further reduced world supply.
“Lower than expected supply, higher demand, volatility in Brent crude oil prices and geopolitical tensions remain factors determining the direction of prices,” said Mohd Izham.
The MPOC estimated that Malaysia’s benchmark palm oil prices would remain between 6,500 and 6,800 ringgits until the end of July, and fall between 6,300 and 6,500 ringgits until September due to the recovery. of Indonesian exports, said Mohd Izham.
“A price correction for all vegetable oils should take place by the end of the fourth quarter of 2022, but palm oil will likely trade above 6,000 ringgit per metric ton,” he added. .