Minister: Optimistic outlook on 2024 palm oil market

KUCHING (Jan 11): The Malaysian oil palm industry may stage a brighter performance this year with better key indicators fuelled by expectations of robust palm oil demand from key destinations, said Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani.

According to him, the palm oil market maintains an optimistic outlook for 2024.

“Our oil palm industry remains a key driver of the country’s economic growth, exerting significant influence on the competitive global oils and fats market despite grappling with substantial challenges both locally and globally including unpredictable weather conditions, geopolitical unrest, and shifts in trade policies,” he said in his speech during the Palm Oil Economic Review & Outlook Seminar (R&O) 2024 in Kuala Lumpur today.

Meanwhile, Malaysian Palm Oil Board (MPOB) director general Datuk Dr Ahmad Parveez Ghulam Kadir in his presentation at the seminar said that crude palm oil (CPO) price may average higher between RM3,900 and RM4,200 per tonne this year compared to RM3,809.50 per tonne in 2023.

This is due to insufficient supply and higher demand from importing countries.

“Another key driver that will influence the price of CPO for this year is the implementation of B35 biodiesel mandate in Indonesia which is expected to limit global palm oil supply for the export market.

“We also foresee tight production of soybeans at least until April this year,” he said.

According to Dr Ahmad, Malaysian palm oil stocks which are projected at 1.95 million tonnes for this year would also drive the price of CPO. Stocks stood at 2.29 million tonnes in 2023.

He estimates CPO production to rise by 1.1 per cent to 18.75 million tonnes  this year from 18.55 million tonnes in 2023, to be attributed to expected increase in mature areas and improved labour situation in the country’s oil palm industry.

Datuk Seri Johari expects further improvement in the labour situation this year with the ongoing Government initiatives to streamline the immigration process for foreign workers.

Meanwhile, Dr Ahmad said the Government’s Oil Palm Replanting Incentive Programme which will help 1,500 oil palm independent smallholders to replant old and unproductive trees as well as grants and loans covering 5,900 hectares throughout Malaysia will also drive CPO production.

Exports of palm oil are expected to rise by 3.3 per cent to 15.60 million tonnes this year from 15.1 million tonnes in 2023, to be supported by higher demand from importing countries particularly, China and India.

Similarly, export value of palm oil and palm-based products is expected to rise by 4.3 per cent to RM110 billion for 2024 from RM105 billion for the previous year.

R&O 2024 featured industry experts who presented nine papers on the performance of the oil palm industry for 2023, market prospects and palm oil price outlook for 2024, as well as developments, challenges and opportunities in the oil palm sector. About 1,000 participants are expected to attend the seminar physically and via online.

At the event, MPOB and PNB Research Institute Sdn Bhd (PNBRi) sealed a memorandum of understanding (MoU) on palm oil-related knowledge-sharing activities and initiatives.

The objective of the MoU is to establish strategic collaboration that will benefit both parties by exchanging related information, sharing knowledge and expertise, and performing other mutually agreed upon scopes of cooperation from time to time.

MPOB also launched its updated e-book on Customs Tariff Codes for Palm Oil & Other Palm-based Products and Schedule of Tariff Rates (Based on HS 2022) which indicates MPOB’s continued role of supporting the well-being of the Malaysian palm oil industry through the dissemination of pertinent and comprehensive market information.

The book contains updated information on import and export duties for palm oil & other palm-based products based on Customs Duties Order 2022. It is hoped that publication of the book could assist the Malaysian palm oil industry with the applicable tariff codes to be used for their declaration in the documentations for exportation and importation of oil palm products.

In addition, this e-book is also a useful reference for government officials from various Ministries and agencies during their negotiations, especially on Free Trade Area (FTA) and World Trade Organisation (WTO).