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PETALING JAYA: The plantation sector will likely see the impact of the hot and dry weather spell more towards the later part of 2024, but total production of the year will likely be higher year-on-year (y-o-y), helped greatly by the availability of adequate supply of labour to the sector.

Datuk Dr Ahmad Parveez Ghulam Kadir, director-general of the Malaysian Palm Oil Board (MPOB), told Starbiz the heat spell driven by the El Nino phenomenon became severe in the fourth quarter of last year (4Q23) and extended into 1Q24, adding that the impact of the weather phenomenon on oil palm yield is not immediate.

“The effect varies based on the severity of the event, with strong El Nino events often impacting yields significantly, while weak-to-mild events typically do not.

“The recent El Nino event, which strengthened at the end of 2023 and continued through early 2024, is considered strong and is expected to affect fresh fruit bunch (FFB) production by the end of 2024,” he said.

Despite that, crude palm oil (CPO) production is projected to continue to increase by 1.1% in 2024 to about 18.75 million tonnes, up from 18.55 million tonnes in 2023 and 18.45 million tonnes in 2022.

This growth in total production will be supported by the improvement in labour availability for the sector and better fertiliser application, he said.

Lower fertiliser prices compared to previous years have made it more affordable for farmers to apply the necessary nutrients to their crops, enhancing growth and yield.

“While weather conditions, particularly the ongoing effects of El Nino, will certainly influence production levels, the industry’s resilience and adaptive strategies play a crucial role.

“The combination of improved labour conditions and effective fertiliser use helps mitigate some of the adverse effects of El Nino, supporting a modest increase in production,” Ahmad Parveez explained.

Fundamentals for the sector remain strong. In May, CPO production hit 1.7 million tonnes, which was 13% higher month-on-month (m-o-m) and 12% higher y-o-y, which was above analysts’ expectation.

Ahmad Parveez said the improved labour situation ensures that harvesting and other crucial activities are conducted efficiently and on time, which is vital for maintaining and boosting CPO production.

Any negative weather impact was also neutralised partly by the lower fertiliser cost, which made it more feasible for planters to apply adequate amounts of fertilisers and are essential for the growth and yield of oil palms.

Better fertilisation application can help increase production, despite the challenges posed by the weather factor, he said.

Year-to-date, CPO production increased by 9.4% y-o-y to 7.26 million tonnes, offsetting the increases in exports that grew by 6.7% y-o-y to 6.3 million tonnes.

Production growth is set to continue. MIDF Research noted that although the mild El Nino peaked in April, the mixed dry-wet weather might be prolonged up to July, thereby improving estate activity ahead, particularly in terms of FFB evacuation processes and manuring activities.

The research firm expects CPO production to maintain its momentum in the remaining months, reaping the benefits of fertiliser application over the past two years.

RHB Research meanwhile stated with weather conditions having normalised since April to May in Indonesia, production in the world’s largest CPO producer should start to pick up in the coming months.

Indonesian planters continue to expect to see flattish-to-moderate output growth of 0-5% in 2024, it added.

From a CPO price perspective, the May MPOB data also showed exports for the month of 1.38 million tonnes were up 12% m-o-m and 28% higher y-o-y, which helped ensure stock levels growth saw a marginal increase to 1.75 million tonnes (up 1% m-o-m, 4% y-o-y) as increased domestic usage helped as well.

What’s important for planters is the palm oil exports are starting to show a rebound with destination markets seeking to shore up depleted edible oils stock levels.

The outlook for the April to June 2024 period suggests a rebound in imports by India, China and Pakistan, driven by the improved price competitiveness of palm oil after price rallies in competing vegetable oils like sunflower.

Indian importers are capitalising on the lower export prices available on the global market, following a significant reduction in its domestic stocks during 1Q24.

“This trend is expected to bolster India’s palm oil imports in the coming months. Similarly, China has begun to incrementally increase its imports of palm oil, soyoil and rapeseed oil to replenish its reduced stocks. This strategic move aims to stabilise the domestic market and ensure sufficient supply,” Ahmad Parveez said.

He believes that demand from these key markets will continue, thereby firming the price of CPO.

Furthermore, the current high crude oil prices at above US$80 a barrel are expected to further boost demand for palm oil, which in turn will support CPO prices.

Buyers may be having other ideas. Cargo surveyors Intertek and Amspec estimated palm oil exports for the first 10 days of

June had decreased by 20.4% and 21.6% m-o-m to 295,000 and 285,000 tonnes, respectively. This will likely pressure prices.

“We expect CPO prices to weaken over the next six-to-12 months on rising output. The key risk is a strong La Nina, which could affect global vegetable oil output and support prices. A mild La Nina could be positive for palm oil output, especially in Indonesia which has suffered due to El Nino last year.

“Indian buyers are price-sensitive and we think they may wait for prices to correct,” said Akash Gupta, director of credit research and analysis at Fitch Ratings.

TA Research noted Indonesia had implemented a reduction in palm oil export tariff in June, setting the reference price for CPO in June at US$778.82 per tonne, down from US$877.28 a tonne in May.

This adjustment would reduce the export tax for CPO to US$18 per tonne and the levy to US$75 a tonne, resulting in a reduction of export costs by US$49 per tonne compared to the previous month.

“We anticipate this may pose a threat to Malaysian palm oil exports, which are losing export competitiveness. If the production were to maintain its robust growth momentum, it would lead to resurgent palm oil stockpiles, which would potentially limit the CPO price increase,” the research house noted in a sector report.

It expects CPO prices in the coming months to be influenced by both palm oil production in Malaysia and Indonesia and weather patterns in the primary soybean-growing regions of Brazil and Argentina, where the La Nina weather could leave its mark the most.

TA Research added the US Department of Agriculture estimated global soybean production is set to hit a new record of 422.3 million tonnes, up some 25.3 million tonnes from 2023 and 2024 due to expanded planted acreage and average yield improvements.

Global soybean ending stocks for 2024 and 2025 are estimated at 128.5 million tonnes, up some 16.7 million tonnes from the previous year.

As such, MPOB anticipates firm CPO prices in 2024, ranging between RM3,900 and RM4,200 per tonne, helped by demand from key markets.

The benchmark three-months forward CPO futures contract on Bursa Malaysia Derivative yesterday last closed at RM3,930 a tonne, up RM14 for the day. CPO has been trading range bound between RM4,500 to RM3,500 in the past 23 months.

 

https://www.thestar.com.my/business/business-news/2024/06/12/cpo-production-projected-to-increase

 

Sumber : The Star

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THE benchmark active Malaysian crude palm oil futures contract experienced a notable decline after reaching RM4,443 per metric tonne in early April. This came after the breakout of a mid-term parabolic bowl accumulation pattern that began forming in July 2023 and culminated in mid-March 2024. Bearish sentiments, influenced by anticipated weaker exports, increased production, lack of competitive pricing against other vegetable oil substitutes and stabilisation of the Malaysian ringgit after its continued depreciation, have driven this decline.

The recent decline in crude palm oil prices has restored its price competitiveness against other vegetable oils as spreads narrowed, supporting current price levels. However, any potential for significant upside may be limited if it becomes relatively more expensive compared to its substitutes.

Therefore, sharp price movements are likely to quickly retrace and normalise without strong fundamental triggers from demand and supply. Since May 2024, the palm oil market has entered a phase of price consolidation, forming a short-term symmetrical triangle with prices converging around RM3,930 per metric tonne. A breakout from this pattern is anticipated within the next one to two weeks.

Zooming out, the current price patterns align with a longer-term parabolic bowl accumulation pattern that began forming in July 2022, following a sharp decline from the all-time high in Q2 2022.

Looking ahead, the likely path appears to be upward for the coming month, with immediate resistance at RM4,150 per metric tonne and stronger resistance at RM4,500 per metric tonne, which coincides with the resistance line of the longer-term pattern. Conversely, if market fundamentals trigger a downside breakout from the symmetrical triangle, support levels are expected at RM3,800 and RM3,500 per metric tonne.

This would maintain alignment with the longer-term pattern, set to complete by Q2 2025, targeting the RM4,500 resistance level by then.

The Malaysian ringgit, pivotal in crude palm oil futures trading, shows potential for appreciation against the US dollar following a triple top formation in the USD/MYR pair in October 2023, February 2024, and April 2024. This suggests limited upside potential for palm oil prices due to increased costs for US dollar holders, potentially dampening demand.

 

https://www.businesstimes.com.sg/companies-markets/crude-palm-oil-futures-set-gradual-ascent

 

Sumber : The Business Times

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Taking to //www.tiktok.com/@bradmie85/video/7388386562922286344">TikTok, this netizen shared how a crude palm oil spill in Port Klang affected the waterways due to a leakage in the factory’s pipes.

 

Turning the waterway orange, men can be seen plunging themselves into the river and pumping out spilt oil.

Taking to the comments section, here is what we found out about the situation.

Apparently, a pipe burst caused the oil spill. The oil can’t be used as it is still considered crude oil. In due time, the oil may solidify and it will have a much bigger impact on the ecosystem.

Here are some choice comments that were left behind in the TikTok post by Malaysians.

“A drum of CPO is around RM300++.”

“Won’t it affect their skin? CPO is used for cooking oil, cosmetics and soap, so it is not harmful to the skin.”

Let’s hope that the cleanup will get underway soon.

 

https://worldofbuzz.com/crude-palm-oil-spill-devastates-port-klang-waterways-turning-it-bright-orange/

 

Sumber : World of Buzz

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KUALA LUMPUR (July 16): The palm oil industry should explore repurposing residuals as a crucial feedstock for sustainable aviation fuel (SAF), moving beyond traditional uses of palm oil, said Deputy Investment, Trade and Industry Minister Liew Chin Tong.

He emphasised the need for the palm oil industry, alongside other non-aviation sectors, to contribute to positioning Malaysia at the forefront of the sustainable fuel landscape.

“This is also an opportunity for us to connect Malaysian industries horizontally, so that not only are we supplying the global supply chain, but also creating more domestic innovations and products that will eventually be of relevance globally,” he said during the opening remarks at the MyAero Sustainable Aviation Symposium 2024 today.

Liew highlighted the importance of both vertical integration within Malaysian industries and horizontal linkages between sectors to shape the aviation industry’s future.

He also referenced the Malaysia Aerospace Industry Blueprint 2030, detailing 41 initiatives expected to generate RM55.2 billion annually and create 32,000 high-tech jobs by 2030.

“We hope to establish Malaysia as the aerospace hub in the region and the global community, and to build synergy with neighbouring states through promoting supply chain development and the use of sustainable alternatives such as sustainable energy fuel, electricity and hydrogen-based energy,” he said.

Meanwhile, National Aerospace Industry Corporation Malaysia (Naico) chief executive officer Prof Shamsul Kamar Abu Samah highlighted Malaysia’s industry environmental, social and governance (iESG) framework as pivotal for aerospace firms transitioning to sustainable practices.

“This includes initiatives such as developing cleaner technologies, improving fuel efficiency and investing in sustainable manufacturing processes.

“Collaborative partnerships between governments, aerospace companies and research institutions are essential for driving these innovations forward and achieving shared environmental, social and governance goals while maintaining economic viability and competitiveness in the global market,” he added. – Bernama

 

https://www.theborneopost.com/2024/07/16/deputy-minister-urges-palm-oil-industry-to-repurpose-residuals-for-sustainable-aviation-fuel/

 

Sumber : The Borneo Post

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Deputy Plantation and Commodities Minister Datuk Chan Foong Hin and Tawau MPOB officers visited Teck Guan Sg Burung Palm Oil Mill. — Borneo Post pic

TAWAU, Jan 14 — Deputy Plantation and Commodities Minister Datuk Chan Foong Hin said that the RM100 million set aside by the federal government under Budget 2024 as replanting incentives will be in the form of "one-to-one” matching grants through TSPKS 2.0 for qualified smallholders.

"The distribution of this replanting incentive will be one of my ministry’s key projects this year, with the ultimate aim of accelerating the replanting of oil palm plantations that are more than 23 years old and ensuring the continued and sustainable development of Malaysia’s palm oil industry,” he said.

Chan, who is also Member of Parliament for Kota Kinabalu, said this during a dinner organized by the Tawau Chinese Chamber of Commerce on Saturday night.

Chan made a whirlwind working visit to Tawau yesterday. He visited Teck Guan Group of Companies’ palm oil mill near Sungai Burung, Balung in the morning, attended a dialogue meeting with the Tawau Chinese Chamber of Commerce and Tawau Agriculture Association at the Tawau town centre in the afternoon, and then proceeded to the swearing-in ceremony of the Tawau Chinese Chamber of Commerceat SJK© Kung Ming’s school hall in the evening.

Teck Guan Group’s Sg Burung Palm Oil Mill was the first mill that Chan had visited after taking office as the Deputy Minister of Plantation and Commodities on December 13, last year.

Chan noted that the Teck Guan Group was founded by fellow Sabahan entrepreneurs from scratch.

He was received by Datuk Hong Ngit Ming, Managing Director of Teck Guan Group of Companies.

Officers from the Sabah branch of the Malaysian Palm Oil Board (MPOB) were also present.

During the visit to the said palm oil mill, Chan and the MPOB officers had witnessed the entire oil palm processing chain and saw first-hand how the company maximize the use of every part of oil palm in high-productivity operations.

"I also learned that the Teck Guan Group had also invested a lot of efforts in renewable energy power generation, which certainly deserves commendations,” said Chan.

After the palm oil mill visit, Chan attended a dialogue meeting with about 30 committee members from the Tawau Chinese Chamber of Commerce and Tawau Agricultural Association.

During the dialogue, he was informed of the challenges faced by smallholders in the oil palm industry, especially in the Tawau area.

In return, Chan had shared with those present the support that federal government agencies and departments can provide to palm oil smallholders in order to form a complete ecosystem for the sustainable development of the palm oil industry. — Borneo Post

 

https://www.malaymail.com/amp/news/money/2024/01/14/deputy-minister-rm100m-oil-palm-replanting-incentive-distribution-one-of-plantation-ministrys-key-projects/112438

 

Sumber : Malay Mail