KUALA LUMPUR: Crude palm oil prices are expected to remain stable this month, as a strengthening ringgit currency offset tighter supplies and stagnant exports to key destinations, state agency Malaysian Palm Oil Council (MPOC) said on Wednesday.
Malaysia's benchmark prices are seen trading within a range of 3,850-4,050 ringgit (US$907.59-US$954.74) a metric ton this month, with the ringgit's appreciation against the dollar strengthening crude palm oil prices in European markets, MPOC said in a statement.
It said prices would be capped at 4,050 ringgit as palm oil was currently trading at a premium over soft oils in key markets such as Europe and China, where imports were expected to remain flat.
"As the market anticipates a tighter palm oil supply in the coming months, largely due to Indonesia's upcoming implementation of the B40 biodiesel programme starting in January 2025, palm oil prices are expected to remain stable in September," MPOC said.
Benchmark crude palm oil futures have been hovering near six-month lows so far this month, however, they rose 3 per cent to close at RM3,848 a metric tonne on Wednesday.
The MPOC said Malaysia's palm oil inventories between September and November this year were unlikely to reach the 2.3-2.4 million tons range seen in the same period last year, despite higher production expected in the coming months.
Palm oil stocks in Malaysia, the world's second-biggest producer, jumped to their highest in six months in August as monthly production reached a nine-year high amid a slowdown in exports, industry regulator the Malaysian Palm Oil Board said earlier this month.
The MPOC previously forecast output to increase by 2.4 per cent to 19 million tons in 2024, while exports were expected to rise 3.1 per cent to 15.6 million tonnes.