KUALA LUMPUR: Industry experts have different price forecasts for crude palm oil (CPO) this year, but they all seem to agree that 2012 will be a better year for the commodity than the past two years. Their forecast average prices range from RM3,100 to RM3,610 per tonne. In comparison, CPO was traded at an average of RM3,210 in 2011 and RM2,701 in 2010.
ISTA Mielke GmBH (Oil World) executive director Thomas Mielke said CPO prices would average about RM3,450 per tonne, given that the outlook for palm oil output was going to be moderate this year.
“We expect Malaysia will increase its CPO output by only about 0.4 million tonnes to 19.3 million tonnes, while Indonesia is expected to slow its output by 1.6 million tonnes or less, to 25.5 million tonnes,” he said yesterday during the palm oil price outlook session at the Palm & Lauric Oils Conference & Exhibition Price Outlook 2012 with the theme Global Shocks Local Impact.
Mistry expects the price of CPO to hover at between RM3,450 and RM3,600 after June.
Another speaker at the conference, Malaysian Palm Oil Board (MPOB) senior research officer Ramli Abdullah, expects CPO prices to range from RM3,100 to RM3,610 per tonne.
He said the prices were usually influenced by economic factors such as soybean oil prices, production and crude palm oil.
“The production of palm oil for Malaysia is expected to increase to 19.36 million tonnes this year under normal weather situation and increase in new plantings, matured area and replanting,” he added.
LMC International chairman Dr James Fry said he forecast Malaysia's CPO production to be unchanged from the 2011 total at 18.9 million tonnes and forecast CPO price to be at an average of RM3,250 per tonnes if Brent crude oil trades at US$125 (RM375) per barrel.
Rabobank International Asia Head of Food & Agribusiness Research & Advisory John Baker forecast Malaysia's CPO production this year to be 19.2 million tonnes, while price was expected to peak to near RM3,500 per tonne before starting to moderate after the second half of 2012.
Godrej International Ltd director Dorab Mistry believes that Malaysia's CPO production this year would be at the range of between 18.6 million tonnes and 19 million tonnes.
“I'm expecting a flat production for Malaysia this year as a result of a low cycle for palm trees,” he said.
Malaysia's CPO production in 2011 was 18.9 million tonnes.
He expects the price of CPO to hover at between RM3,450 and RM3,600 per tonne after June and that it would decline only after evidence of the low cycle end around November.
Touching on the export taxes by the Indonesia, he said Malaysia had effectively asked its refiners to fend for themselves.
“Malaysia can opt to adopt a carbon copy of Indonesia's export tax regime and do away completely with the duty-free export quota for CPO. As they say, if you cannot beat them, you join them!” he said.
It was reported that Indonesia had last year cut export taxes on refined grades that helped its domestic processors restart their factories and offer discounts to overseas buyers.
That turned margins negative for refiners in Malaysia and the Government was looking at ways to keep investments flowing into its RM60bil sector.
Malaysia usually charges a high duty on crude palm oil shipments to protect its domestic refining industry. It does not impose any export taxes on processed palm oil. The country has 51 refineries with a combined yearly capacity of 22.9 million tonnes. It is planning new capacity of 9.6 million tonnes
3-Mar-12 The Star Biz
