Palm crude oil prices, which have seen a huge volatility in the last six months, are expected to go up by 8-10 per cent as the demand for the staple edible oil grows across countries. Ahmad Parveez Ghulam Kadir, Director-General of Malaysian Palm Oil Board (MPOB), told businessline that the prices, which are ruling around 4,000 ringgit a tonne, could go up to 4,300-4,500 ringgit in the next few months.
He attributed the likely uptick in the demand and prices to the upcoming Chinese New Year in January 2023 and Eid in April in the Middle-East, Pakistan, India and in some other countries.
Kadir is part of the Malaysian delegation that is attending the two-day Global Roundtable on Veg Oil and Oilseed Sector organised by the Indian Vegetable Oil Processors’ Association (IVPA).
He said Malaysia is expecting a growth of 0.8 per cent in production despite labour shortages. “This year we expect to produce a bit more. The production is expected to go up to 18.5 million tonnes(mt) this year (January-December) from 18.12 mt last year,” he said.
Sudhakar Desai, President of IVPA, corroborates, pegging a price band of $950-1,200 a tonne for crude palm prices in the next three months. “There is not much scope for a downward movement for palm oil,” he said.
Crude palm prices, which are ruling at around $1,000 a tonne now, witnessed a huge fluctuation this year due to geo-political issues, including the Ukraine-Russia war and Indonesia banning export of crude palm oil and then rescinding the decision.
“From $2,000 a tonne in June, it fell by half and lower. It even touched $800. But since the prices dropped, the consumption demand has picked up,” Desai said.
In order to increase the domestic production, India should focus on yields, the MPOB Director-General said. “India has about 26 million hectares of oil crops and produces 10 million tonnes of output. The area is four times more than Malaysia’s oil crops area but the output is only half of Malaysia’s output,” he said.
“India should focus increasing yields in the existing oil crop area,” he said.