KUALA LUMPUR (Jan 5): The Malaysian Palm Oil Council (MPOC) is forecasting crude palm oil (CPO) prices to remain above RM3,000 per tonne, or at an average price of RM3,217 per tonne, in 2021.
In contrast, the average CPO price in 2020 stood at RM2,700 per tonne.
As the effects of the pandemic will be less obvious especially in the second half of 2021, MPOC chief executive officer Datuk Dr Kalyana Sundram opines that CPO prices should correct themselves.
Kalyana, however, said palm oil prices will continue at the current levels in the first quarter of 2021, with an average forecast of RM3,650 per tonne.
“Despite the reinstatement of CPO export duties, prices are expected to remain firm as concerns of supply limitations due to heavy rains in January to February will impact production,” said Kalyana, in a virtual conference at the Palm Oil Trade Fair and Seminar 2021 today.
In a best-case scenario, MPOC is estimating CPO prices to peak at RM3,850 per tonne, while hitting a low of RM3,500 per tonne.
“The January 2021 delivery price for CPO has already exceeded RM3,800 per tonne,” he added.
Last year, CPO prices hit 2020’s trough at RM1,953 per tonne but rapidly rallied to end the year at nearly a decade high of RM3,891 per tonne.
At the time of writing, CPO prices were at RM3,819 per tonne.
Notably, this is most likely due to Malaysia imposing a zero CPO export duty from June to December 2020, which effectively reduced the overall stock level and progressively increased CPO prices.