KUALA LUMPUR (Jan 7): Oil World editor and chief executive officer (CEO) Thomas Mielke predicted today that annual growth in oil palm output will slow in the years ahead due to a confluence of factors, including a lack of replanting and lower yields.
"The limiting factors are slower acreage expansion, a lack of replanting and low potential yields,” Mielke said at the Palm Oil Trade Fair and Seminar 2021 today.
Mielke said a possible slowdown in China’s crude palm oil (CPO) imports in July and August 2021 may impact CPO prices.
With oil palm production rising and the CPO inventory likely to recover from March or April 2021, he expects a moderate price setback for CPO in 2021.
Mielke, however, said the oil palm production recovery will not be as strong as the recovery seen four years ago when oil palm output grew by some eight million tonnes a year then.
“This year, the recovery [in oil palm production] will be more moderate as Malaysia is expected to see an increase of 300,000 tonnes, while Indonesia [is expected to see an increase] of 3.4 million tonnes,” he added.
On Bursa Malaysia today, the CPO price for January 2021 had fallen RM31 to RM4,009 a tonne as at 3.16pm, while the February 2021 contract dropped RM18 to RM3,999.
According to the Malaysian Palm Oil Board’s (MPOB) website, Malaysia between January and November 2020 exported 15.74 million tonnes of palm oil to 172 countries.
Malaysia's major palm oil export markets include China, India and the Netherlands, the MPOB said.
According to the MPOB, Malaysia’s cumulative palm oil exports to China stood at 2.58 million tonnes between January and November 2020.
During the 11 months, Malaysia exported 2.18 million tonnes of palm oil to India and 994,584 tonnes of the commodity to the Netherlands, the MPOB said.