InfoSAWIT, JAKARTA - Chief Executive of Westbury Group and Chairman of the Pakistan Edible Oil Refiners Association (PEORA), Abdul Rasheed JanMohammad, stated that Pakistan has secured stocks of refined palm oil (RBDPO/Olein) for the last quarter of 2024, taking advantage of cheaper forward prices in August and September. Apart from that, Pakistan also imports around 150,000 metric tons of soybean oil to meet its domestic needs.
In the last few months, global palm oil prices have jumped significantly. The main causes are investment funds taking long positions, tight crude palm oil (CPO) supplies in Indonesia, and the Indonesian government's plan to increase the blend of palm-based biodiesel from B35 to B40. The Indonesian Palm Oil Entrepreneurs Association (GAPKI) estimates that this policy could increase palm oil consumption by up to two million tonnes.
However, the Indonesian government's decision to implement B40 sparked debate. JanMohammad questioned the urgency of this policy, especially in the midst of already high CPO prices and the approaching month of Ramadan which usually drives a surge in domestic demand. "Do we need to increase the blend to B40 when crude oil prices are weak? Is palm oil more important for food or fuel?" he said.
Global palm oil production also faces seasonal challenges. The November to March period is known as the low production season, which this year coincides with major celebrations such as Chinese New Year, Ramadan and Eid al-Fitr. Additionally, heavy rainfall expected to hit Indonesia and Malaysia during the rainy season could further tighten supplies.
In Malaysia, palm oil stocks in September 2024 were recorded at 2.013 million tonnes. However, stocks are expected to decline starting November due to the low production season. Palm oil prices on the Bursa Malaysia Derivatives (MDEX) show high volatility in 2024, with a high of RM 4,865 per tonne on November 1 and a low of RM 3,624 per tonne on January 3, reflecting a fluctuation of 34.24%. (T2)
For more details, read the January 2025 edition of InfoSAWIT Magazine
