Oleochem Analytics — Malaysia maintained the December export duty for crude palm oil (CPO) at 8pc, as the reference price rose to record highs, a circular on the Malaysian Palm Oil Board (MPOB) website showed on 19 November.
The world’s second-largest palm oil producer calculated a reference price of 5,119.75 ringgit/t for December, up from 4,523.29 ringgit/t in November.
Although exports and stocks from Malaysia have increased since the beginning of the year, palm oil prices have hit the highest levels seen in a decade on the loss of viable Fresh Fruit Bunches (FFB).
In the MPOB’s latest stocks data, Malaysia’s ending stocks in October were about 4pc above Jan 2020, and up 38pc from Jan 2021. The historical fundamental relationship between stocks and prices may be overridden by other inflationary factors and the unusual unison upward movement of stocks and prices observed earlier this year has resumed in the past three months.
Malaysia’s yields were limited because of an ongoing labour shortage exacerbated by Covid-19 and adverse weather conditions caused by La Niña.
Malaysia’s Ministry of Home Affairs announced in October that palm oil industry companies, as part of the Agriculture sector, can hire foreign workers as part of its labour resources, and it has also lifted entry restrictions from five previously banned countries: India, Sri Lanka, Pakistan, Bangladesh and Nepal, where incoming travelers can now enter Malaysia to work, according to a 23 September notification by the Immigration Department of Malaysia.
Although the two measures are expected to ease the lack of workforce in palm oil plantations and mills that has caused a decline in output during peak harvest and the loss of revenue for planters, Covid-19 protocols will delay their entrance while the peak harvest season comes to an end.