KUALA LUMPUR (March 16): The price of crude palm oil (CPO) peaked at RM4,247.50 per tonne yesterday, an all-time high in the country's palm oil industry history, compared with RM4,193 per tonne recorded on Thursday, which was the highest in 13 years.
Plantation Industries and Commodities Minister Datuk Dr Mohd Khairuddin Aman Razali said the surge triggered the price of fresh fruit bunch in Peninsular Malaysia to exceed RM900 per tonne, a significant increase from RM300 a year ago.
"We must be thankful. It's definitely an added blessing from Allah," he said among others, in a Facebook post today.
According to the Malaysian Palm Oil Board (MPOB), the CPO price has potential to remain high based on current positive market sentiments, namely low stock levels, increased palm oil exports, and the strengthening price of soybean oil in the world market.
MPOB's data also showed that the commodity has been registering an average price of RM3,895.50 per tonne over the past month.
The same data showed last year's highest CPO price was RM3,788 per tonne.
Yesterday, Bloomberg reported that palm oil prices were expected to record their best performance in a decade even though the Covid-19 pandemic had not shown any abatement worldwide.
Benchmark futures for the tropical oil, used in everything from cooking oil to shampoo, will average RM3,200 per tonne in 2021, the highest in a decade, according to the median of 23 estimates in a Bloomberg survey of analysts, traders, and plantation executives.
Singapore-based Palm Oil Analytics owner Sathia Varqa said La Nina and diminishing inventory in Malaysia have spurred the market, but prices may be under pressure in the second half when palm oil and soybean oil production intensifies again.
"As production has been lower and stock is at its lowest for a number of years, CPO prices are expected to continue rising until mid-February, but subsequently subside when production begins to recover and stocks increase from March onwards," he said.