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Palm oil price drop to hit local market

Chea Vannak / Khmer Times Share:

Palm oil production is expected to drop over the next few months but instability in the international market is likely to drive down local prices by the start of next year, a Cambodian palm oil producer has warned.
Mong Reththy, president of Mong Reththy Group, an agro-industrial conglomerate which runs Mong Reththy Investment Cambodia Oil Palm Co. Ltd, said the market will remain stable in the short term, but global trends will put pressure on prices after May.
Tight supplies following droughts in 2015-16 are expected to support the market over the next two months, but downward pressure will build from May, as palm oil output picks up in Indonesia and Malaysia.
Delegates at the world’s biggest edible oil conference in Malaysia last week predicted palm oil prices will fall by more than 15 percent by 2018.
Dorab Mistry, a leading analyst in the sector, expects prices to fall by nearly 12 percent by as early as June-July.
“When the price in Malaysia goes down, ours will also go down, because we depend on the market there to set our prices,” Mr. Reththy said.
However, Mr. Reththy said the price drops will be manageable.
“The decline in the price of crude palm oil will not be as much as it was when it dropped to its lowest in the past. It will still be at a good level.”
The price of crude palm oil in Malaysia was $634 a metric ton last week.
Mong Reththy Group, the first commercial oil palm company in Cambodia, cultivates the fruit across 16,000 hectares, Mr. Reththy said.

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