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POINTERS 2014 MPOC
Palm Oil Internet Seminar
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Section 1: CPO Price Trend:
Development in G3 Soybean Production and CPO Price Outlook for 2018
By: Mr. Oscar Tjakra

Oscar Tjakra is a Senior Analyst in Rabobank's global RaboResearch Food and Agribusiness department. He is located in Singapore, and focuses on palm oil and grains and oilseeds sector. Oscar was previously a RaboResearch Food & Agribusiness Analyst with Singapore branch from July 2008 to October 2010 covering various sectors including grains and oilseeds, sugar, cocoa and animal protein. In his most recent role, he was Senior Vice President of Freight Research with Oldendorff Carriers Singapore, where he led global supply and demand research of the grains & oilseeds sector. Oscar holds a Master of Science in Applied Finance from Singapore Management University and Bachelor of Engineering (Hons) from Nanyang Technological University.
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Global soybean markets have the potential to behave very unpredictably in 2018, with several key drivers of potential price volatility. Global biodiesel policy, feed demand growth, and increasing global trade are likely to be mildly supportive prices in 2018 as global balance sheets contracts, particularly in major exporter surpluses. Despite our view of a slight YOY reduction in global ending stocks, global soybean prices in 2018 are expected to be capped by historically high inventory.

Meanwhile, Indonesian and Malaysian palm oil yields are expected to normalize in 2018. This coupled with an increase in mature palm oil plantation areas in both countries, will result in rising global palm oil production, providing downward pressure to prices in 2018. In addition, global soft oil supplies in 2018 are expected to be record high, on the back of large soybean, rapeseed and sunflower seed crops across major producing countries. Availability of these soft oils will provide competition for palm oil demand and curb palm oil price rallies.


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Questions & Answers (1) :
Sathia Varqa
11 months ago
Hi Oscar, Thanks for the presentations. Do you see the Malaysian government suspension of CPO export tax from Jan to Mar making significant impact on prices? So far (3 weeks) it has not done much to support prices, though the strong Ringgit been spoiling the party.
POINTERS SECRETARIAT:
Posted on behalf of Mr Oscar : We think the recent temporary removal of Malaysian CPO export tax will have limited impact on CPO prices. We expect palm oil demand from India and China to remain sluggish in the short term due to availability of edible oil domestically. India’s edible oil port stocks increased by 25.1% yoy in December 2017 to reach 876,000 tonnes. 475,000 tonnes of these port stocks were palm oil, while the remaining were soft oils. We also expect Chinese palm oil import demand for Lunar New Year to be limited this year due to high edible oil inventories level. As of mid-January 2018, soybean oil inventories at Chinese ports as well as with the factories, at 1.51 million tonnes, were higher 63.2% yoy. Domestic palm oil inventories in China also increased by 35.1% yoy to reach 646,200 tonnes as Chinese buyers imported higher yoy volumes of palm oil in 2H2017.
11 months ago
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