Crude palm oil uptrend here to stay

SINCE touching an all-time high in May 2021, the crude palm oil (CPO) market has shown no sign of slowing down. Prices broke through, setting new record highs for most of the last 6 months in a rally that was driven by a combination of fundamental factors.

Firstly, industry data continues to paint a bearish picture for palm oil supply as production inefficiencies remain in the industry due to Covid-19. This has caused palm oil output in the second largest producer, Malaysia, to drop to a 5-year low despite the market seeing sustained record prices.

As the palm oil sector used to depend mostly on foreigners, the on-going cross-border and cross-state movement restrictions have severely crippled the industry's labour force and impaired harvesting operations.