Larger Than Expected Production and Usage of Palm Oil in 2018/19 Prices have started to recover.Vegetable oil demand will need to be rationed in 2019/20 owing to diminishing production growth.

摘要

Outlook 2019/20: The growth in world production of palm oil and palmkernel oil will slow down pronouncedly and a setback is expected in coconut oil.Furthermore,world oilseed production will probably diminish more than anticipated and this will curb veg.oil production.As a result,world production of 8 vegetable oils is seen growing by only 3.8 Mn T next season,the smallest increase in four years.We currently assume that world consumption will exceed production by 1.4 Mn T in 2019/20,enforcing a pronounced reduction of stocks.We peg them at 27.1 Mn T by end-Sept 2020,1.4 Mn T below the year-ago level and decimating the stocks/usage ratio to 13.4%,versus 14.5% estimated as of end-Sept 2019.We assume a slowdown in the growth of world consumption from 8.7 million in 2018/19 to 5.6 Mn T in 2019/20.The growth rates will slow down inevitably in Indonesia,following a bigger than expected boost in the past 12 months.Plans to further raise mandatory admixture may be postponed or fulfilled only partly under the assumption of tightening supplies and the likelihood of widening price premiums of palm oil over fossil diesel.