Growth in palm oil industry, better outlook
KUALA LUMPUR: The Malaysian palm oil industry is expected to show growth in 2024 in light of recovery in labour supply, improved palm oil price projections and heightened demand from key export destinations, said Bursa Malaysia Bhd chairman Tan Sri Abdul Wahid Omar.
He said that while the palm oil industry’s outlook appears positive, market participants should remain vigilant of possible interlocking challenges.
“These may come in the form of the increasingly unpredictable weather conditions, potential shifts to global trade and environmental, social and governance (ESG) policies, and ongoing geopolitical risks, all of which could significantly impact palm oil trade,” he said in his welcoming remarks at the 35th Palm and Lauric Oils Price Outlook Conference and Exhibition (POC2024) yesterday.
Abdul Wahid said that according to the Malaysian Palm Oil Board (MPOB) January 2024 report, palm oil exports are projected to grow by 3.3 per cent, reaching 15.60 million tonnes in 2024 from 15.10 million tonnes in 2023.
He said similarly that the export value of palm oil and palm-based products is expected to increase by 4.3 per cent to RM110 billion in 2024 from RM105 billion last year.
“The ample supply of fresh fruit bunches drove palm oil prices to normalise to an average of RM3,890.50 per tonne in 2023, following the record high of RM5,087.50 per tonne in 2022.
“Palm oil exports also saw a 1.1 per cent decrease due to reduced demand, resulting in higher stocks,” he said.
On the exchange front, Bursa Malaysia Derivatives’ Crude Palm Oil Futures (FCPO) contract for the entire 2023 recorded a trading volume of 14.8 million contracts or equivalent to 370 million metric tonnes, almost five times that of global production.
Abdul Wahid said the palm oil industry remains a significant contributor to Malaysia’s economy, standing as one of its main commodity exports.
“Although pandemic-driven supply chain disruptions eased in 2023, global commodity markets still contended with strong headwinds, including monetary tightening, elevated geopolitical tensions and unpredictable weather conditions, among others,” he added.
Bursa Malaysia Derivatives Bhd is hosting POC2024 from March 4 to March 6, 2024, at the Shangri-La Hotel in Kuala Lumpur.
POC2024 is expected to draw over 2,000 delegates from more than 50 countries and was officiated by Minister of Plantation and Commodities Datuk Seri Johari Abdul Ghani.