Palm oil fell 7.3% for the week, but experts expect prices to rise in 2024

Malaysian palm oil has fallen for six straight sessions and futures fell to a 3-week low yesterday ahead of July production and export data. Experts believe that importers have built up enough stocks, so Malaysia will reduce supplies in August after strong exports in June and July.

In July, palm oil exports from Malaysia grew by 7.8% compared to June, according to surveyor AmSpec Agri Malaysia, and by 14% according to Intertek Testing Services (ITS).
September palm oil futures on Bursa Malaysia fell 0.23% to 3,872 ringgit/t, or $855/t, on Tuesday, losing 7.2% for the week.

State agency Malaysian Palm Oil Board (PBOB) said crude palm oil prices in Malaysia in the second half of 2023 will be 3,700-4,200 ringgit/t and will be supportive in the long term. However, there is a possibility that prices could rise to RM4,300/t or $952/t and above ahead of 2024 amid uncertainty over Black Sea sunflower oil supplies and lower-than-expected palm oil production in Malaysia.

In the first half of 2023, palm oil production in Malaysia (the world's second largest producer) decreased by almost 3% compared to the same period in 2022.

By December 2023, the world's largest buyers, India and China, will collectively import 16.5 million tons of palm oil, compared to 15 million tons in 2022.

"There will be an increased demand for palm oil in the ASEAN and MENA regions as a result of the competitive price for it and the shortage of domestic production," MROS experts predict.

The supply of sunflower oil from Ukraine to Asian countries is limited due to the blocking of ports, which contributes to the activation of palm oil sales.