KUALA LUMPUR, Nov 23 (NNN-BERNAMA) – Fitch Solutions Country Risk and Industry Research, yesterday trimmed palm oil short-term price forecasts, on the easing of global edible oils market and weaker demand outlook.
The Fitch Group unit said in a report, it made a downward revision of 6.2 percent to its average palm oil price forecast for 2022, from 5,200 ringgit (1,135 U.S. dollars) per tonne, to 4,880 ringgit (1,066 U.S. dollars) per tonne.
This was due in part to a greater-than-expected softening in prices through the second half.
In spite of the revision, its updated price forecast of 4,880 ringgit (1,066 U.S. dollars) per tonne represents an increase of 17.6 percent on the average price level in 2021, driven by the surge in prices over the first half, when the consecutive shocks of the onset of the Russia-Ukraine conflict and the Indonesian palm oil export ban, saw prices average 5,878 ringgit (1,283 U.S. dollars) per tonne.
Overall, it believes, the average palm oil price will hover around 4,000 ringgit (873 U.S. dollars) per tonne, through the remainder of 2022.
On a year to date basis, palm oil futures prices have averaged 5,029 ringgit (1,098 U.S. dollars) per tonne through 2022, and closed at 3,850 ringgit (841 U.S. dollars) per tonne on Nov 17.
The research house also made a downward revision of five percent to forecast for the average palm oil price in 2023, from 4,000 ringgit (873 U.S. dollars) per tonne to 3,800 ringgit (830 U.S. dollars) per tonne.
This was on the back of an expected loosening in the global edible oils market, brought about by weaker prospects for global demand.
This represents a forecasted decline in average palm oil prices of 22.1 percent, year on year, between 2022 and 2023.
The research house’s price forecast remains above the average palm oil price level, seen between 2018 and 2020, which stood at 2,416 ringgit (528 U.S. dollars) per tonne, reflecting its view that, global markets will remain relatively tight in recent historical terms, despite some easing of the acute reaction to the Russia-Ukraine conflict, supported by the recent renewal of the Black Sea Grain Initiative.
Fitch Solutions also made a slight downward revision to its forecast for the average palm oil price in 2024, lowering its outlook from 3,500 ringgit (764 U.S. dollars) per tonne, to 3,400 ringgit (742 U.S. dollars) per tonne.
The research house, however, holds its forecasts for 2025 and 2026 constant, at 3,000 ringgit (655 U.S. dollars) per tonne and 2,600 ringgit (568 U.S. dollars) per tonne, respectively.– NNN-BERNAMA
