Indonesia's biodiesel policy and the likely arrival of the El Nino weather pattern could further strain global inventories of palm oil, raising prices later this year according to leading industry officials and analysts
The market for vegetable oils is set to tighten for a year from mid-2023 as global biodiesel production could rise by around 4.5 million tonnes in 2023, leading industry analyst, Thomas Mielke told a palm oil conference in Kuala Lumpur.
Indonesia, the world's biggest producer of palm oil, raised the mandatory blend of palm oil in biodiesel to 35% starting in February, from 30% earlier to reduce diesel fuel imports amid high global energy prices and to reduce emissions.
"Rising demand and limited growth in [vegetable oil] supplies would bring us into a global production deficit in July to December this year and January to June 2024," said Mielke, who heads Hamburg-based research firm, Oil World.
He forecast Malaysian refined bleached deodorised (RBD) palm olein prices could jump nearly 16% to US$1,150 per tonne in the second half of 2023.
Malaysian production in 2023 is likely to rise by 600,000 tonnes to 19 million tonnes, while Indonesian production is seen rising by 1.2 million tonnes to 47.7 million tonnes, he said.
For more information on the palm oil trade, particularly between Indonesia and China, please read https://www.fareasternagriculture.com/crops/food-commodity/embracing-sustainability-wwf-supports-palm-oil-trade-between-china-and-indonesia