The Malaysian Palm Oil Council (MPOC) has forecast its 2022 palm oil production at 18.6 million tonnes, up from 18.1 million tonnes in 2021, after the entry of migrant workers which will help ease a labour shortage at plantations. MPOC had lowered its production outlook on Wednesday this week but pegged prices to remain above MYR6,000 (USD1,367.37) a tonne until the end of July.
Prices should ease to MYR6,300-MYR6,500 until September after the resumption of Indonesian exports.
“A price correction for all vegetable oils is expected to take place by late Q4 of 2022 but palm oil will likely be traded above 6,000 ringgit per metric tonne,” said MPOC Deputy Director Mohd Izham Hassan. According to Mohd Izham, the global palm oil dependency will continue to rise in 2022 as will demand for other oils and fats.
Global vegetable oil prices have skyrocketed this year as Russia’s invasion of Ukraine disrupted sunflower oil shipments while Indonesian export restrictions further squeezed global supplies.
“Oils and fats exports in 2022 will likely be close to 97 million metric tonnes and palm oil share could be as high as 60%,” Mohd Izham said. “[However] lower than expected supplies, higher demand, volatility of Brent crude oil prices, and geopolitical tensions remain factors in determining price direction.”