He said that while the palm oil industry’s outlook appears positive, market participants should remain vigilant of possible interlocking challenges.
“These may come in the form of the increasingly unpredictable weather conditions, potential shifts to global trade and environmental, social and governance (ESG) policies, and ongoing geopolitical risks, all of which could significantly impact palm oil trade,” he said in his welcoming remarks at the 35th Palm and Lauric Oils Price Outlook Conference and Exhibition (POC2024) today.
Abdul Wahid said that according to the Malaysian Palm Oil Board (MPOB) January 2024 report, palm oil exports are projected to grow by 3.3%, reaching 15.60 million tonnes in 2024 from 15.1 million tonnes in 2023.
He said similarly that the export value of palm oil and palm-based products is expected to increase by 4.3% to RM110 billion in 2024 from RM105 billion last year.
“The ample supply of fresh fruit bunches drove palm oil prices to normalise to an average of RM3,890.50 per tonne in 2023, following the record high of RM5,087.50 per tonne in 2022.
“Palm oil exports also saw a 1.1% decrease due to reduced demand, resulting in higher stocks,” he said.
On the exchange front, Bursa Malaysia Derivatives’ Crude Palm Oil Futures (FCPO) contract for the entire 2023 recorded a trading volume of 14.8 million contracts, or equivalent to 370 million metric tonnes, almost five times that of global production.
Abdul Wahid said the palm oil industry remains a significant contributor to Malaysia’s economy, standing as one of its main commodity exports.
“Although pandemic-driven supply chain disruptions eased in 2023, global commodity markets still contended with strong headwinds, including monetary tightening, elevated geopolitical tensions, and unpredictable weather conditions, among others,” he added.
Bursa Malaysia Derivatives Bhd hosted the POC2024, attracting over 2,000 delegates from 50 countries. The event was officially inaugurated by the plantation and commodities minister Johari Abdul Ghani.