KUALA LUMPUR (Jan 11): Malaysia’s palm oil inventory level is expected to fall by 14.8% to 1.95 million tonnes in 2024, from 2.29 million tonnes in 2023, in anticipation of better exports, said Malaysian Palm Oil Board (MPOB) director general Datuk Dr Ahmad Parveez Ghulam Kadir.
“I hope we can export more [palm oil], and this will eventually bring down our stock. That’s why we believe that crude palm oil (CPO) prices can increase, averaging around RM4,000 this year,” he told The Edge on the sidelines of the Palm Oil Economic Review and Outlook Seminar 2024 on Thursday.
Malaysia recorded a high palm oil inventory level of 2.29 million tonnes in 2023, as exports shrank due to lacklustre demand from China.
Meanwhile, plantation analysts said the high carry forward inventory level may not bode well for the CPO price performance in 2024.
Ahmad Parveez added: “In 2018, we can see that when our CPO prices slowed to RM1,800, inventory was very high at around 3.2 million tonnes. Indonesia also did not have any real policy on the export of CPO, and that’s why we imported a lot, and our inventory level shot up.
“But now, Indonesia just started implementing [the] B35 biodiesel mandate in the middle of last year. Their palm oil production may be affected, while their internal consumption may increase due to the biodiesel.
“So I think that's what gives us a niche opportunity in terms of [a] better market, and will eventually bring down our inventory scale,” he said.
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