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Geopolitics in the World Delivered Profits for Palm Oil

Doc. InfoSAWIT
Geopolitics in the World Delivered Profits for Palm Oil

InfoSAWIT, JAKARTA - Crude palm oil (CPO) price is mostly influenced by fundamental factors, such as, supply and demand, including crude oil and other vegetable oil prices.

Of course, geopolitics eventually delivered impacts, just like in 2022. The war between Russia and Ukraine, as the biggest sunflower oil producers. 70% of sunflower oil markets in European Union derived from the two countries.

The war made vegetable oil supply stuck. European countries as the consumers got deficit supply and have to use palm oil again though Europe with all its power encouraged food and energy industries not to use palm oil.

Not only Europe, every vegetable oil consumer country got the impact. At the time, CPO got more expensive. In addition, Indonesia in March 2022 banned palm oil exports because of palm cooking oil supply issue in the domestic.

The peak was CPO once hit at RM 6.000 per ton. It was the most expensive one in the past decade. It made many vegetable oil consumer countries got pressed and Covid-19 pandemic was having no solution still.

Some countries, such as, India, Pakistan, and Bangladesh started decreasing CPO demands because of its price. They started multiplying supplies from soyoil though it was not too much expensive and it was cheaper than palm oil.

It is true that if the world has issue, palm oil would get blessing with its expense but other countries would get economic pressure. The question remains, what about palm oil price in the future?

Of course, there are many factors to consider until the late of this year to know price look in 2024. Analysis from PT Kharisma Pemasaran Bersama Nusantara (KPBN), by the III quarter of 2023, some factors would influence CPO price, such as, peak production in the United States of America (USA) that should plant soybean; the prediction of dry season. Then in the IV quarter of 2023, precisely in October 2023, it would be peak production of soybean in USA (soybean planting would be starting in South America).

From this condition, other vegetable oils just did revision, for instance, soyoil in USA, canola in Canada would be having decreasing production.

From the reasons, by the late of 2023 CPO could be at RM 3.800 to RM 4.200 per ton. Would the numbers remain high in the early of 2024 which is the political year in Indonesia?

To know CPO price outlook in 2024, dear readers could read Majalah InfoSAWIT, September 2023. (T2)