Palm Oil Industry May See Full Recovery In 4Q20, If Pandemic Manageable: CPOPC

KUALA LUMPUR, July 22 (Bernama) -- Palm oil industry may see a full recovery in the fourth quarter of this year if COVID-19 pandemic is manageable and contained, Council of Palm Oil Producing Countries (CPOPC) said. The council also believed that there is a possibility of a rebound in the market given the ultra-loose monetary policies of many central bankers and the government’s stimulus package. “CPOPC remains optimistic that palm oil is heading for a price recovery in the second half of 2020 due to improving global consumption and dwindling production after COVID-19 outbreak,” it said in a statement Wednesday. The Malaysia Palm Oil Council predicted the crude palm oil (CPO) prices to hit RM2,594 per tonne in the second half of 2020 and averaging at RM2,337 for the year. It said the gradual opening up of major markets post COVID-19 starting from June 2020 is also expected to make the price outlook bullish. Palm oil is a daily item needed for production of food and toiletries with countries expected to begin importing and stocking their supplies notably by China and India. According to the council, a push to use more palm oil in biofuels particularly by Indonesia will augur well for lower stocks and higher prices and an attractive CPO price discount against other edible oils is another plus factor. As for production from two of the world largest palm oil producer; Indonesia and Malaysia, it said the output is expected to be lower this year due to last year's dry weather and lower fertilizer application and current lower labour supply. The potential of La Nina in the second half of the year would also dampen any prospects of increased production. -- BERNAMA