BANGI: Crude palm oil is among the commodities that are expected to benefit in the event of a trade war between the United States and China, as the latter may purchase more palm oil, said Oil World executive director Thomas Mielke.
“So far, China has threatened to retaliate if the US were to implement import taxes on Chinese products… but so far, the threat is just an announcement,” he told reporters on the sidelines of the Programme Advisory Committee Seminar organised by the Malaysian Palm Oil Board yesterday.
China, the world’s largest soybean importer and the biggest buyer of US soybean, earlier announced that it may impose a 25 per cent tariff on soybean imports from the US in retaliation against US’ proposed tariffs on its goods.
“China’s decision to impose taxes will only be decided in May or early July,” he said.
On the CPO price outlook, Mielke said the prices were expected to decline by US$40-US$50 (US$1=RM3.87) per tonne from the current RM2,300 per tonne.
“This is due to global production surplus and building up of stocks, particularly in Malaysia and Indonesia, and CPO prices can reach the lower level in July or August.
“We can see downward pressure on the prices due to production surplus in the April-September time frame,” Miekle said.
However, he noted that the prices would very much depend on the weather in North America, as well as in sunflower oil-producing countries.
Looking ahead to the 2019-2020 period, Mielke projected that CPO prices would appreciate due to expectations that the palm oil industry may enter a period of production deficit.
“We expect 2018 to be a year of production surplus, but 2020 may be the year that the shortages will take place and continuing onwards,” he said. — Bernama