Malaysia’s Palm Oil Council chief executive officer said that Crude Palm Oil prices are unlikely to be depressed this year with various strategies put in place to curtail excess supply and keep prices from coming down, Bernama reports.
However, the pricing will still depend on the supply and demand fundamentals as well as the movement of the petroleum market, he said. "We have set up bio-fuel blending together with Indonesia. So, coming down is not possible but going up depends on the market fundamentals," he said.
The present 1.8 million mt in crude palm oil stockpile, is expected to be reduced by the end of February. The reduction is based on several strategies such as the oil palm replanting scheme, a higher duty free export quota for CPO and mandating the B5 palm oil bio-diesel use within Malaysia.
It is expected that 200,000 hectares of land to be replanted would eventually displace an estimated 700,000 mt of CPO supply from the market. In strategic move to help manage stocks, the government has also increased the annual export quota for CPO to 3 million mt from 2.5 million mt.