POINTERS: Oils & Fats Market Prospects and Price Forecast with Special Focus on Palm Oil

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Questions & Answers (8) :

MEGAT SYAZWAN SHAH

1 year ago

Dear Mr Mielke, With the monsoon season coming to Malaysia at the end of 2021, do you reckon the production will continue to plummet to a new low?

Thomas Mielke:
Dear Megat Syazwan Shah, it is my pleasure to respond. We at Oil World forecast crude palm oil output in Malaysia to decline to a 5-year low of 18.2 Mn T calendar year 2021. It cannot be ruled out that actual production even turns out 0.1 or 0.2 Mn T lower. This compares with 19.1 Mn T last year and 19.9 Mn T in Jan/Dec 2019. In Malaysia, average yields per mature hectare are falling to a 20-year low in 2021, as pointed out in my presentation, mainly due lack of replanting in the past few years, a severe labour shortage and management issues. Best regards Thomas Mielke
1 year ago

Melody Loke

1 year ago

Thank you for sharing your presentation. Do have have an expected price range of which CPO will be traded from now until the end of 2021.TQ

Thomas Mielke:
Currently high prices of palm oil and other veg oils are not sustainable, unless South American soybean production prospects deteriorate pronoucedly, as we discuss in our latest reports (www.oilworld.de), in which the Oil World team refers to the prospective recovery of stocks worldwide caused by the anticipated increase in world production of veg oils as well as by the price-responses of consumption (demand losses both in the edible and biofuel categories). But also the impacts of the high energy prices, speculative activity, government interferences and other external factors will have to be acknowledged.
1 year ago

Aquidah

1 year ago

Hi Mr. Thomas, What is your view on Indonesia's plans to ban CPO export? How do you foresee the supply demand dynamics and the CPO prices reaction to the ban? Thanks

Thomas Mielke:
I am indeed sceptical that an export ban on CPO will really be announced. There is already a very high export tax and levy of a combined US-$ 341 on exports of CPO compared with US-$ 214 on RBD palm olein and 189 on RBD palm stearin, which is promoting domestic processing of CPO and which has raised export prices of Indonesian CPO over other origins.
1 year ago

Akmal

1 year ago

How is the low water level in Parana which is expected to last till the end of the year affecting the Argentina’s soybean and soyabean oil export?Any updates. with China actively evolving its environmental protection policy, what do you see its changing the country’s usage of edible oil and how is it going to affect palm oil prospects?

Thomas Mielke:
The water level is currently unusally low. Vessels can load only part of their usual cargo in Rosario and are directed to Brazilian ports to fill up. But Argentine exports od soya oil and meal were still comparatively high in August and September.
1 year ago

HCLeow

1 year ago

Dear Thomas, Have you factor in the potential impact on production from the coming La Nina ? In your opinion, what is the level of vegoil inventory in EU and is that consider norm or tight situation? What is your estimation of palm oil usage for energy use in EU for 2020/21 and 2021/22? As you mentioned SFO price is now cheaper that RSO and replacing RSO in biodiesel blending, is SFO also taking the market share of PO for biodiesel use? Thank you.

Thomas Mielke:
This year the weather risks are grater than ususally, due to La Nina in Oct/Jan 2021/22. We have reduced our estimates on yields per ha below potential. EU stocks of veg oils are currently tight and down an estimated 0.4 Mn T from a year ealier, as published in today's Oil World Weekly. Palm oil consumption for energy continued to decline in the EU-27 in 2021. A further decline is in prospects for 2021/22. Details are given in the Weekly of Oct 22. Kind regards Thomas Mielke
1 year ago

attila szalai

1 year ago

Dear Mr Mielke can you please comment the influence of biodiesel production increase in EU on the edible palm oil market in 2022? If I´m not mistaken, the total PO market in EU is around 7 mio MT. Will this movement of the capacities lead to support bullish market ?

Thomas Mielke:
Dear Attila Szalai, thanks for your question to which it is my pleasure. In the European Union palm oil imports are currently declining pronouncedly. In the just released Oil World Weekly we have highlighted the latest development of imports and consumption of vegetable oils and pointed to the sharp decline in the production of biodiesel & HVO in the EU-27. Here is a quote of the Oct 22 Weekly: "In the EU-27 consumption of palm oil plunged by more than 0.5 Mn T in Oct/Sept 2020/21. The imports fell to a five-year low of 7.4 Mn T, down from the record 8.36 Mn T in the season 2018/19. EU members can no longer count palm oil-based biofuels towards their renewable energy targets according to the RED II directive...."
1 year ago

Mohd Feroize

1 year ago

Can your update on the President Biden’s policy on US biofuel? How is the policy affecting US soybean, soybean oil demand and supply as well as the prospect of palm oil in US under his era?

Thomas Mielke:
Dear Mohd Feroize, No doubt, changes in the US biofuel policies have an important impact on the global market, affecting demand and prices of soya oil (and indirectly also of soybeans and soya meal) as well as of palm oil and other oils & fats. US production of biodiesel & HVO turned out lower than expected in the past three months. However, for calendar year 2021 we still expect US production to rise by 0.6 Mn T from last year to a new high of approximately 8.5 Mn T. What is the outlook? The market is still waiting for the details of the biofuel policy of the new US Administration. It remains to be seen whether the new mandates for calendar year 2022 will be somewhat less ambitious than earlier indications. In addition to the framework announced in Washington, biofuel initiatives of individual US states need to be monitored, primarily in California. – Nationwide, a significant expansion in green energy (HVO) production capacities is currently planned by the US industry for the years ahead, which will substantially increase domestic US consumption of soya oil, canola oil, palm oil, used cooking oil and other oils & fats and will impact prices of oils & fats in the USA and worldwide.
1 year ago

WONG YQ

1 year ago

The recent China fertilizer import/export control will it impact on the production on vegetables oil worldwide? Will this factor support the current high price further continue?

Thomas Mielke:
Dear Wong YQ. Thanks for your question. The Chinese export restrictions contributed to the recent steep price appreciation of fertilizers on the world market and also spilled over to vegetable oils. Indeed, this an important factor which should be monitored closely in respect to availability from other exporting countries and the further development of fertilizer prices with their impacts on production costs of grains as well as of oilseeds & oils.
1 year ago