– Fitch Solutions Country Risk and Industry Research on Tuesday cut short-term palm oil price forecasts on easing global edible oil markets and a weaker demand outlook.
The Fitch Group unit said in a report that it has revised its 2022 average palm oil price downward by 6.2 percent from RM5,200 (US$1,135) per tonne to RM4,880 (US$1,066). US dollars) per ton.
This was partly due to a larger-than-expected price decline in the second half to date.
Despite the revision, its updated price forecast of RM4,880 (US$1,066) per tonne represents a 17.6 percent increase in the average price level in 2021, driven by rising prices during the first half. , when back-to-back shocks from the start of the Russia–Ukraine conflict and Indonesia‘s palm oil export ban caused prices to average 5,878 ringgit (US$1,283) per tonne.
Overall, he believes the average price of palm oil will be around 4,000 ringgit (US$873) per tonne for the rest of 2022.
Year-to-date, palm oil futures prices have averaged RM5,029 (US$1,098) per tonne through 2022 and settled at RM3,850 (US$841) per tonne on November 17, 2022.
The research house also made a downward revision of 5 percent to forecast the average price of palm oil in 2023, from 4,000 ringgit (US$873) per tonne to 3,800 ringgit (US$830) per tonne.
This was due to an expected easing in the global edible oil market triggered by weaker prospects for global demand.
This represents a forecast decline in average palm oil prices of 22.1 percent per 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 RM2,416 (US$528) per tonne, reflecting its view that World markets will remain relatively tight in recent historical terms despite some easing of the sharp reaction to the Russia-Ukraine conflict, supported by the recent renewal of the Black Sea Grain Initiative.
Fitch Solutions also slightly revised downward its forecast for the average palm oil price in 2024, lowering its outlook from RM3,500 (US$764) per tonne to RM3,400 (US$742) per tonne.
However, the research house is keeping its 2025 and 2026 forecasts constant at RM3,000 (US$655) per tonne and RM2,600 (US$568) per tonne, respectively. ■