Bursa Malaysia


Palm Oil Internet Seminar

Section 1: Price Directions:
Global Supply, Demand and Price Outlook for Palm Oil in 2017
By: Marketing And Market Development Division, MPOC

The Marketing & Market Development Division spearheads the promotion and marketing activities of Malaysia Palm Oil in the effort to make it the leading oil in the global oils and fats market. The aim is to create and establish a positive image for Malaysia Palm Oil in order to maximise returns to the Malaysian palm oil industry. Market Expansion This Division enhances the growth of the Malaysia Palm Oil market through new developments and the expansion of existing markets. To compete successfully, innovative approaches are developed. Various proactive programmes targeting trade and consumer markets are carried out to extend into new markets. In addition, new opportunities for investment, cooperation abroad and joint marketing are constantly being sought out to obtain a greater market foothold. Seminars Trade fairs and seminars such as Palm Oil Trade Fair and Seminars (POTS) showcase the products and services of palm oil producers and sellers, while broadening their business opportunities. At these events, business contacts and participants are updated with information and knowledge about the palm oil industry. Market Networking The development of a market intelligence network, market linkages and awareness programmes helps foster closer ties with industry-related bodies. These strategies help to educate and influence those who have a keen interest in Malaysia Palm Oil, i.e. policy makers, the trade community, consumers, scientists, medical professionals and researchers.
The global oils and fats market in 2016 was one that no one could have ever foreseen. Prices fluctuated wildly especially in the second and third quarters of the year as the market responded on reports that total production was not as high as originally anticipated. The El Nino induced drought severely impacted palm oil production in the two main producing countries, Malaysia and Indonesia. Nevertheless, production still exceeded 200 million MT despite the production problems in some countries.

In 2017, we anticipate that there will be growth but the rate of growth but is not likely to see much gains insofar as overall production. In this year the oils and fats production globally will again be led by palm oil which we forecast will exceed 60 million MT and will play a crucial role in the global supply of oils and fats.

As the two top palm oil producing countries contributing to 85% of the global palm oil production, Malaysia and Indonesia will be the focus of the international oils and fats trade. With 30% of the global oils and fats production coming from Malaysia and Indonesia, the role played by both countries is vital in forecasting palm oil price.

During the year of 2016, palm oil prices have fluctuated between a low of RM2,257/MT before ending on a high of RM3,200/MT in December. The stabilising crude mineral oil price during this period impacted the price of not only palm oil but also other edible oils such as soybean and sunflower oils. These are among some of the issues that will be highlighted in this paper.

This paper will analyse issues that will affect palm oil price in 2017 such as demand and supply analysis and we will also take into account the influence of the current drop in crude oil price on palm oil price especially in the first half of this year. Demand for palm oil from major consuming countries such as India, China, EU and USA is nevertheless, expected to remain upbeat and we will take these factors into account. The regional analysis on the demand and supply scenarios will be aggregated at the global level to forecast the price, demand and supply balance in 2017.

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Questions & Answers (2) :
Izham Hassan
4 months ago
En. Muhamad Hafiz, Thank you for your question. The stronger Ringgit against the USD would invariably have an impact on CPO but only on a short term. CPO price would stabilize once the RM/USD reach parity levels. The most significant influence on CPO price would still be the production by the two major producers as well as demand from major consuming countries.
Muhamad Hafiz Abd Aziz
4 months ago
Financial analysts expects the Ringgit would be stronger against US Dollar through 2017. Any significant impact to the CPO price due to stronger Ringgit against US Dollar?
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Palm Oil Prices Amidst Market Challenges in 2017
Feb 20, '17 ~ Feb 26, '17
2nd Half 2016 Price Trends and Market Directions
Aug 22, '16 ~ Aug 28, '16
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