An oil palm plantation worker loads fresh fruit bunches into a truck. — Bernama photo
KUCHING (Dec 30): The Malaysian palm oil industry has projected the price of crude palm oil (CPO) next year will stabilise at an average of RM3,800 per tonne.
In a statement today, the Malaysian Palm Oil Board (MPOB) said palm oil production is expected to be highly anticipated, especially in the second half of next year due to the compounding effect of the ongoing Russia-Ukraine conflict.
“This is in anticipation of higher palm oil production, weather conditions which are expected to improve – especially in the second half of next year – and expected higher availability of supply of other major vegetable oils,” MPOB director-general Datuk Dr Ahmad Parveez Ghulam Kadir said.
He said MPOB has projected 2023 CPO production would reach up to 19 million tonnes, slightly higher than this year, but the price will only stabilise as applications for migrant workers is approved in stages.
He also said the price of CPO this year averaged at RM5,100 a tonne, 15.7 per cent higher compared to RM4,407 a tonne last year.
“Generally, we expect the performance of the Malaysian palm oil industry to be better next year than that of 2022.
“CPO production is projected to further increase to 19 million tonnes for 2023 due to the expected increase in the productive areas, especially in Peninsular Malaysia and Sarawak.
“We expect a slow recovery of palm oil production due to the issue of labour shortage in the oil palm plantations, especially for fresh fruit bunches (FFBs) harvesting and unloading activities. Additionally, the workforce situation may stabilise next year as foreign worker applications are approved in stages,” he said.
Ahmad Parveez said despite the slow recovery, MPOB remains optimistic about the prospects of Malaysian palm oil in 2023.
He pointed out the recently implemented Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) would be an important catalyst for Malaysia’s palm oil industry to grow as greater opportunities to access new markets widens.
“The ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on 30 September 2022 will encourage demand for palm oil products as it broadens the country’s access to new markets such as Canada, Mexico, and Peru, which are not covered by any existing Free Trade Agreement (FTA).
“Based on Cost Benefit Analysis on the potential impacts of the CPTPP, upon ratification and implementation of the CPTPP, tariffs for palm oil products are now reduced from a maximum of 6 per cent for Canada, 5 per cent for Mexico, and 9 per cent for Peru to lower tariffs based on the tariff elimination schedule,” he said.
Apart from higher palm oil exports to the markets, Ahmad Parveez also believes that elimination of tariffs will improve Malaysian palm oil’s competitiveness in CPTPP member countries.
According to him, closing stocks of palm oil are projected at two million tonnes in 2023, higher than that in 2022 due to the expected higher supplies of other major vegetable oils including palm oil.
He also said that CPO production is expected to increase slightly by 2.1 per cent to 18.50 million tonnes this year, compared to 18.12 million tonnes in 2021.
“In anticipation of higher production, we expect the closing stocks of palm oil in 2022 at 1.85 million tonnes, up by 0.24 million tonnes or 14.9 per cent compared to 1.61 million tonnes in December 2021,” he added.