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CPO Could be Better in June at RM 3.900 to RM 4.150 per Tons

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CPO Could be Better in June at RM 3.900 to RM 4.150 per Tons

InfoSAWIT, PETALING JAYA – In May 2024, palm oil stock in Malaysia got escalated 0,5% to be 1,75 million tons. The increasing production reached 13%. The limited increasing supply happened for the increasing demands that surpassed the supply. Palm oil production in the country increased 203.000 tons in May, while the combination of export and consumption in the country increased 212.000 tons.

As InfoSAWIT quoted from Malaysian Palm Oil Council (MPOC) on Sunday (16/6/2024), palm oil price could be increasing in June. The increasing production in Malaysia could be slower than it in the second semester of 2024 while the exports would keep increasing. From January to May 2024, Malaysia got impressive production and exports. The increasing production reached 9% (626.000 tons) and the exports increased 7% (393.000 tons).

In the contrary, Indonesia got crude palm oil (CPO) decreasing production up to 647.000 tons (5,0%) from January to March 2024, as Indonesian Palm Oil Association (IPOA) reported. It means, the combination of palm oil production in Malaysia and Indonesia could be decreasing half of million tons in the first quarter of 2024. Even though the production in Malaysia kept being positive, the stock in the two countries would not be too high.

Canola oil, sunflower oil, and soyoil in Europe could be increasing up to 6%, 8%, and 7% for each in May, CPO price got cheaper 4%. As the result, soft oil premium price could be increasing from USD 40 to be USD 115, which is hoped, it would support palm oil export recovery in Malaysia.

The prediction of soyoil production by United States Department of Agriculture in 2024/25 could be increasing up to 4%. As the result, the stocks of soyoil in the globe could be increasing 6%, or hitting the highest level in the past decade in 2024/25. That is why vegetable oil supply would remain enough.

Palm oil could get the support up to RM 3.900 in June because the combination of supply from Malaysia and Indonesia could be closer by the late of 2024, as same as the increasing palm oil exports. But the increasing price could be restricted at RM 4.150 because USDA predicted, vegetable oil production would be surplus in 2024/25.

By the progress, palm oil industries in Malaysia and Indonesia would significantly face the challenges and opportunities. The increasing exports and competitive price would be the keys to face the market dynamic in the globe that keeps changing. (T2)