KUALA LUMPUR – With global uncertainties in weather, geopolitics, and economics that have produced significant price fluctuations this year, Malaysia’s palm oil board warned of a rough 2023 for the world’s most consumed edible oil market on Monday.

Recession fears, Russia’s invasion of Ukraine, and governments’ export restrictions to protect food supplies have caused volatility in the edible oils market.

Malaysia’s benchmark crude palm oil prices hit a record high of 7,268 ringgit (USD1,586.21) a tonne in March but have subsequently fallen by 40%.

“The palm oil situation is projected to remain unpredictable in 2023,” Malaysian Palm Oil Board Director-General Ahmad Parveez Ghulam Kadir told an online seminar.

He stated weather, labour, currency, policy, and geopolitics will affect supply and demand.

He claimed it will not be “as easy as the past few years” when participants could predict the market.

Ahmad Parveez expects tropical storms to interrupt palm oil supplies in Indonesia and Malaysia into the first quarter of 2023, keeping prices high.

Over the past week, Malaysia, the world’s second-largest palm oil producer, has been flooded by the rainy season.

State agency Malaysian Palm Oil Council (MPOC) said flood-related supply issues and a lower ringgit would keep edible oil prices between 4,000 and 4,400 ringgit a tonne until December.

MPOC Chief Executive Wan Aishah Wan Hamid stated prices would be 3,900 to 4,300 ringgit till March 2023, then 3,800 to 4,200 in the second quarter.

Monday’s lunchtime futures contract was 4,172 ringgit (USD910.52).

The MPOC predicted Malaysia’s 2022 crude palm oil production would drop for a third year to 18.08 million tonnes from 18.1 million tonnes last year. Indonesia’s production rises to 46.6 million tonnes from 44.7 million tonnes in 2021.

Info source – Reuters