InfoSAWIT, KUALA LUMPUR – In the latest report, OCBC Global Markets Research revised crude palm oil (CPO) price projection in 2024. It would be about RM 3.650 per ton. Prior the institution projected CPO would be about RM 3.400 per ton.
The changing projection happened for the increasing supply risks that have something to do with El Nino that would always happen in 2024. Though it would be minor, El Nino would always happen and make uncertainty in palm oil trade.
Malaysian Palm Oil Board (MPOB) and Indonesian Palm Oil Associatio(IPOA) would anticipate the stagnant potential because of El Nino. In the same time, Indonesia would escalate its biofuel consumption and would be the big threat for palm oil exports. IPOA predicted that palm oil exports would decrease four percent from Indonesia to be 29 million tons this year. This would happen for the domestic increasing demands to biodiesel mandatory program 35 percent (B35).
As quoted from Bernama, the smaller price disparity between palm oil and other vegetable oils might encourage to produce biofuel, solve the environmental worry. OCBC Research acknowledged that duration and intensity of El Nino would be unpredictable for the next few months but CPO price would be traded in certain numbers because of the close palm oil discount from other vegetable oils.
Besides, United States Department of Agriculture projected soyoil supply would be escalating about 2,9 million tons in 2023/2024, to be reaching 61,9 million tons. The projection also contributed to cheaper soyoil. OCBC Research predicted, Brent oil would be about US$ 80 per barrel in 2024, or cheaper from US$ 82 in 2023. The projection was the same with the economic progress and profitable supply prospect globally.
The cheaper Brent was from the little increasing development expectation in the globe but relatively stable. OCBC Research also declared the supply would be always enough to fulfill the 2024 demands. Though Organization of the Petroleum Exporting Countries (OPEC) and its allay would cut off the production that increase to be 3,9 million barrel per day (mbpd) in the first quarter of 2024 from 3,0 mbpd in December 2023, the higher oil supplies from USA, Brazil and Iran are hoped to support oil trade in the globe. (T2)