KUALA LUMPUR: Will the current crude palm oil (CPO) price rally continue until the first quarter of 2021 (Q121)?
That depends on whether the government would continue with the CPO export duty exemption, said Sime Darby Oils chief operating officer for global trading, Sandeep Bhan.
He said with the current low inventory and strong exports, the commodity is enjoying a good price of above RM3,000 level per tonne, which is expected to sustain until year-end.
“However, whether or not the price rally will sustain until Q1 2021 depends on the government’s position on the CPO export tax for next year,” he said on the second day of the virtual Palm and Lauric Oils Price Outlook Conference & Exhibition (POC).
Sandeep was one of the panel speakers during the POC — an all-in-one digital platform for the exchange of ideas, solutions and trends within the international oils and fats industry — hosted by Bursa Malaysia Bhd.
Under the National Economic Recovery Plan (PENJANA), the government has waived the export duty for CPO, crude and refined palm kernel oil, as well as bleached and deodorised palm kernel oil from July 1 to Dec 31, 2020.
However, Sandeep expressed concern on whether the edible oil would be able to meet current demand with the reopening of economies worldwide.
“The world has no choice but to buy palm but it has limitations in meeting strong demand globally (due to weather factors and labour shortage),” he said.
Citing India, the world’s largest palm oil consumer, he said the country’s 1.35 billion population needs to fulfill its CPO intake of between 600,000 and 700,000 tonnes on a monthly basis.
He said even though the country is price-sensitive, India would still purchase Malaysia’s palm oil.
“Whatever the CPO price is, India’s uptake is around this level, and it will continue for at least a couple of months,” he said.
Sandeep added that India’s quest to reduce palm oil imports and make India self-sufficient in edible oils will be realised anytime soon.
Meanwhile, another panellist, Sumwin Group founder and chief executive officer, U. R. Unnithan, said blockchain technology can be used to boost Malaysia’s palm oil in the European Union (EU) market, especially under its farm-to-fork policy.
He added that the technology will enable the palm oil industry to prove that palm oil is indeed a sustainable production and conforms to the “No Deforestation, No Peat, No Exploitation” norms, and this would conciliate EU countries and organisations which have been critical of palm oil’s sustainability.
“The blockchain system provides trust and enables palm oil industry players to network with partners so that they can have easy access to more sustainable palm oil,” he said. – Bernama