KUALA LUMPUR (Aug 6): Malaysian palm oil prices are set to average RM2,410 (US$591) a tonne in 2018, the Malaysian Palm Oil Council (MPOC) forecast on Monday, down about 14% from last year's average prices, according to Thomson Reuters Eikon data.
Palm oil prices started 2018 at levels above RM2,500 a tonne, but have since drited lower. Benchmark prices closed on Friday at RM2,196 a tonne.
The MPOC also forecast palm oil output in Malaysia, the world's second largest producer, at 20.3 million tonnes in 2018, above last year's 19.92 million tonnes due to better yields.
"For the second half of 2018, palm oil production is expected to be higher, contributed by the peak months in October and November," the MPOC said in a presentation at an online conference.
Exports this year were forecast to reach 17.65 million tonnes, up from 16.56 million tonnes in 2017, leading to year-end stocks 2.8 million tonnes, the highest December levels since at least 2000.
The MPOC is a government organisation that promotes Malaysian palm oil.
Its production forecast is above that of the Malaysian Palm Oil Board, an industry regulator and research body, which expects a slight 20,000 tonne decline to 19.9 million tonnes, due to lower fresh fruit bunch yield brought about by less rainfall.
The MPOB said in its presentation that it expects 2018 exports to increase to 17.4 million tonnes, up from 16.56 million tonnes last year, supported by lower prices in the second half of the year.
It projected closing stocks in December 2018 at 1.99 million tonnes.
(US$1 = RM4.0750)