Malaysian CPO production is expected to exceed 20 million tonnes in 2020
PALM OIL
Malaysian CPO production is expected to exceed 20 million tonnes in 2020
“Malaysia’s high production cycle started in March 2020 and is expected to continue until November 2020, while Indonesian production is expected to increase sharply in 2H20 (from August 2020 to September 2020)” Mistry said.
Mistry added that there will be a high inventory of palm oil in November. It expects Malaysia’s palm oil inventory to be between 2.8 million and 3 million tons, with Indonesia between 8 and 8.5 million tons in November, mainly due to high production, while demand remains weak.
Demand is expected to be weak in 2020, as Covid-19 has negatively impacted the HORECA segment. Mistry added that the current high level of import of vegetable oil to India is mainly due to the current low inventory replenishment.
Mistry said that once supplies have been resupplied, monthly palm oil imports are estimated at 600,000 tonnes, and the country’s demand for vegetable oil will be stable year-on-year in 2020 and normalize in 2Q21.
Total import of vegetable oils from India should be between 13 million and 13.5 million tons in 2020 (from 15.5 million tons in 2019), and increase again from 15 million to 15.5 million tons. tons in 2021.
Additionally, Mistry expects domestic production to increase domestic demand for vegetable oil in India by 2021.
Once the supply has been resupplied, 600,000 tons of palm oil per month are expected to be exported to India, as well as 300,000 tons of soybean oil and 200,000 tons of sunflower oil. Also, Indian imports could be slightly higher in September due to the festive season there. India’s palm oil consumption is only 80% of pre-Covid-19 levels and is expected to increase to 90% in 4Q20. Consumption of palm oil in the country is expected to normalize only in 1Q21 or 2Q21.
In addition, Mistry also expects the Indian government to raise palm oil import tariffs by 5-10% in the coming months, a move designed to provide additional revenue to the Indian government and also to support local vegetable oil production. Meanwhile, the demand for palm oil remains viable in Europe due to the low supply of rapeseed oil and the increase in the market share of palm oil given its status as the cheapest vegetable oil. This is particularly the case for biodiesel, which represents 50% of the total European demand for palm oil.
Indonesia posts $ 1.27b trade surplus in June as economic activity resumes
Exports rose 2.28 percent year-on-year (year-on-year) in June to $ 12.03 billion, the first growth recorded in four months, thanks to increased shipments of manufactured and agricultural products, Statistics Indonesia (BPS) announced Wednesday.
Trade increased significantly in June compared to May, when the country imposed large-scale social restrictions (PSBB) to curb the spread of COVID-19, halting many commercial activities, disrupting supply chains, and forcing manufacturing facilities to temporarily close. In June, exports increased 15.09 percent monthly (mtm) and imports increased 27.56 percent mtm.
Meanwhile, the country’s oil and gas exports decreased in June by 18.52 percent year-on-year to $ 580 million despite rising oil prices, while exports of mining products fell 17.05 percent year-on-year due to the fall in coal prices.
Exports of manufactured goods increased 7.09 percent, driven by increased exports of palm oil and electrical machines, while exports of agricultural goods increased 34.36 percent year-on-year.
China, the United States and Japan remain Indonesia’s main trading partners.
INTERNATIONAL PRICES:
SOYOIL EU: $723 USD
SUNOIL EU: $812,5 USD
FOB INDO: $622,50 USD
BURSA MAL: $611 USD
CPO EXW ECUADOR: $560 – 600 USD
FEP JULY COLOMBIA: $2568 COLOMBIAN PESO
CPO COLOMBIA AND ECUADOR: STARTED THE LOW PRODUCTION CYCLE. SHORTAGE EXPECTED
CPO FOB PERU: $590 – $620 USD
CURRENCIES, BASED ON $1 USD POR EXCHANGE: (JULY/2020)
COP (Colombian peso): $3,625
MYR (Malayan Ringgit): RM 4,27
BRL (Brasilian Real): R$5,35
EUR: 0,87
MXN (Mexican Peso): $22,30
PEN (Peruvian Sol): S/3,50