KUALA LUMPUR: Palm prices are anticipated to stay robust subsequent 12 months as manufacturing will stay constrained due to hovering fertiliser costs and long-standing labour shortages, the Council of Palm Oil Producing Countries (CPOPC) mentioned on Thursday.
The sector, which is already dealing with sluggish yields after farmers decreased fertiliser utilization in 2018 and 2019, could once more endure from decrease inputs subsequent 12 months.
CPOPC mentioned smallholders are anticipated to lower down on inputs as prices of nitrogen and phosphate have jumped by 50%-80% since mid-2021, whereas plantation corporations could face challenges due to provide constraints.
“As a consequence, Indonesia and Malaysia will not be ready to ship a lot output development in 2022,” it mentioned. The two nations collectively represent 85% of the world’s palm oil provide.
Tight provide has already pushed up prices of benchmark crude palm oil futures by 31% thus far this 12 months, with the contract hitting a file high of 5,220 ringgit ($1,252.25) a tonne.
“Production of palm oil will stay constrained with restricted upside potential, and prices will probably proceed to commerce within the bullish vary of US$1,000 per tonne,” CPOPC mentioned, including that the rally in 2022 could possibly be dampened by larger soybean oil output.
The council forecast China’s palm oil imports to rise to 7.2 million tonnes in 2021/22, from 6.8 million tonnes in 2020/21, boosted by an financial restoration.
Imports by India are estimated at 8.6 million tonnes in 2021/22, up from 8.5 million tonnes in 2020/21, whereas the European Union’s imports are estimated to rise to 6.9 million tonnes from 6.2 million tonnes in 2020/21.
CPOPC, nevertheless, warned that the impression from the Omicron coronavirus variant has forged doubts on demand restoration. – Bernama