KUALA LUMPUR: Malaysian palm oil prices are set to hold steady in 2019 at an average of 2,303 ringgit (S$765) a tonne, according to estimates by the Malaysian Palm Oil Council (MPOC), while global output of the tropical oil is expected to rise by 3 million tonnes.
"Global palm oil production is projected to be 72 million tonnes, with Malaysia and Indonesia as leading producers," the MPOC said in an online conference presentation on Monday, report agencies.Rising production could cap recent price gains for palm oil, which has been recovering after touching a 3-year low last November at 1,940 ringgit a tonne.
Benchmark palm oil was trading at 2,281 ringgit a tonne on Monday. The tropical oil averaged 2,308 ringgit last year, according to Refinitiv Eikon data.
MPOC, Malaysia's key marketing agency for palm oil, also estimated that Malaysian output would rise to 20.2 million tonnes in 2019 and pegged Indonesian production at 42.8 million tonnes.
Malaysia produced 19.5 million tonnes of palm oil last year, while Indonesia's 2018 output stood at 42 million tonnes, based on estimates by the Indonesia Palm Oil Association.
Malaysian palm oil output is expected to rise as newly replanted areas start to mature, but the increase will be marginal due to ageing trees and a possible El Nino in 2019 that will curb production, the MPOC said in its presentation.
"Indonesian production is forecast to reach a record high of 42.8 million tonnes in 2019 due to improving weather conditions as well as newly maturing areas," it added.Palm oil exports in 2019 are also expected to increase in 2019, in line with an expected rise in demand from key importer India due to its declining domestic oilseed production.
"India is expected to increase its (vegetable oil) imports by 500,000 tonnes, reaching 15.15 million tonnes, out of which palm oil will account about 10 million tonnes," said the MPOC presentation.