Friday, June 13, 2025
  • Login
198 Japan News
No Result
View All Result
  • HOME
  • BUSINESS NEWS
  • VIDEO NEWS
  • FEATURED NEWS
    • JAPAN US TRADE NEWS
    • JAPAN EU NEWS
    • JAPAN UK NEWS
    • JAPAN INDIA NEWS
    • JAPAN RUSSIA NEWS
    • JAPAN GULF NATIONS NEWS
    • JAPAN AFRICA NEWS
    • JAPAN EGYPT NEWS
    • JAPAN NIGERIA NEWS
    • JAPAN MEXICO NEWS
    • JAPAN BRAZIL NEWS
    • JAPAN THAILAND NEWS
    • JAPAN INDONESIA NEWS
  • CRYPTO
  • POLITICAL
  • TECHNOLOGY
  • JAPAN AGRICULTURE NEWS
    • JAPAN MANUFACTURE NEWS
    • JAPAN AGRICULTURE NEWS
    • JAPAN IMMIGRATION NEWS
    • JAPAN UNIVERSITY NEWS
    • JAPAN EDUCATION NEWS
    • JAPAN VENTURE CAPITAL NEWS
    • JAPAN JOINT VENTURE NEWS
    • JAPAN BUSINESS HELP
    • JAPAN PARTNESHIPS
  • ASK IKE LEMUWA
  • CONTACT
198 Japan News
  • HOME
  • BUSINESS NEWS
  • VIDEO NEWS
  • FEATURED NEWS
    • JAPAN US TRADE NEWS
    • JAPAN EU NEWS
    • JAPAN UK NEWS
    • JAPAN INDIA NEWS
    • JAPAN RUSSIA NEWS
    • JAPAN GULF NATIONS NEWS
    • JAPAN AFRICA NEWS
    • JAPAN EGYPT NEWS
    • JAPAN NIGERIA NEWS
    • JAPAN MEXICO NEWS
    • JAPAN BRAZIL NEWS
    • JAPAN THAILAND NEWS
    • JAPAN INDONESIA NEWS
  • CRYPTO
  • POLITICAL
  • TECHNOLOGY
  • JAPAN AGRICULTURE NEWS
    • JAPAN MANUFACTURE NEWS
    • JAPAN AGRICULTURE NEWS
    • JAPAN IMMIGRATION NEWS
    • JAPAN UNIVERSITY NEWS
    • JAPAN EDUCATION NEWS
    • JAPAN VENTURE CAPITAL NEWS
    • JAPAN JOINT VENTURE NEWS
    • JAPAN BUSINESS HELP
    • JAPAN PARTNESHIPS
  • ASK IKE LEMUWA
  • CONTACT
No Result
View All Result
198 Japan News
No Result
View All Result
Home JAPAN INDONESIA NEWS

Palm oil bulls to roar into 2022 on labor crunch and La Nina deluge

by 198 Japan News
December 29, 2021
in JAPAN INDONESIA NEWS
Reading Time: 4 mins read
A A
0
Palm oil bulls to roar into 2022 on labor crunch and La Nina deluge
Share on FacebookShare on Twitter

[ad_1]

Palm oil bulls will likely hold sway into early 2022 as a chronic worker shortage in No. 2 grower Malaysia and unusually heavy rains in key growing areas disrupt production of the world’s most-consumed edible oil.

That could keep prices elevated after a record year in 2021 when benchmark futures rocketed to an all-time closing high of 5,071 ringgit ($1,213) a ton.

Although Malaysia is trying to expedite the arrival of much-needed foreign workers for its plantations, the spread of omicron may scupper those plans, constrain harvesting and keep supplies tight.

In the first quarter, there may be attempts to reach new highs around 5,200 ringgit and beyond, as supply tightness persists at a time of low seasonal production and festive demand for Lunar New Year, said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental in Mumbai. “But in subsequent quarters, prices will be pressured by good supplies and could decline to 3,975 ringgit or even lower.”

Here are key things to watch in 2022:

Labor squeeze

The production shortfall in Malaysia, which pushed palm to the forefront of the rally in global edible oils this year, could linger into early 2022, as planters may not receive new workers before mid-year. That would further restrain output and potentially drive up benchmark futures in January and February, according to Sathia Varqa, owner of Palm Oil Analytics in Singapore.

“If promises are kept, we should see boots on the ground in May-June,” Varqa said, which would push up production significantly. Output may climb 6% to 19.2 million tons next year if workers return, he said.

Still, that forecast hinges on omicron. A further spread of the new COVID-19 variant could see renewed lockdowns and travel restrictions, preventing new workers from reaching the plantations.

In top grower Indonesia, production patterns will likely return to normal next year, with first quarter yields the lowest, according to Togar Sitanggang, vice chairman of the Indonesian Palm Oil Association known as Gapki. He forecasts an increase of around 3% in full-year output to 48 million tons.

La Nina

The spotlight is currently on La Nina, a weather pattern that causes drier weather in the crop-growing areas of South America while bringing heavier rainfall to palm oil regions of Indonesia and Malaysia, as well as to Australia.

Agriculture investors are on their toes as La Nina threatens to roil global food markets in the coming months. It’s already scorching parts of Brazil and Argentina, major producers of palm’s rival oilseed, soybeans.

A worker loads palm oil fruit at an oil palm plantation in Slim River, Malaysia on August 12. | REUTERS
A worker loads palm oil fruit at an oil palm plantation in Slim River, Malaysia on August 12. | REUTERS

In Malaysia, continuous rain submerged several parts of Pahang and Selangor this month, disrupting harvesting and logistics on palm oil estates, and shutting operations at Port Klang, Southeast Asia’s second-biggest port for several days. The Malaysian meteorological department is forecasting a monsoon surge, which could trigger more rain through Jan. 2.

Fertilizer costs

It’s not just a lack of workers that’s holding back production. Surging prices of fertilizers will force planters, especially smallholders, to cut application of the nutrient to oil palms and potentially derail the anticipated recovery in yields.

“Palm oil’s cost of production based on current fertilizer prices is estimated to be 15% to 20% higher in 2022 from a year ago,” said UOB Kay Hian director of Asean Plantation Research Leow Huey Chuen. “High crude palm oil prices may compensate the high cost, but getting fertilizers delivered on time is another challenge.”

Demand uncertainty

Sky-high prices of palm oil could push up food inflation and erode demand from top buyers such as India and China. With palm getting more expensive, its discount to rival oils will be closely watched by price-sensitive buyers who may switch to other vegetable oils.

“With prices having ruled above $1,200 in physical markets for the large part of 2021, buyers seemed to have gotten used to high prices,” Thiagarajan said. “But anything higher than $1,300 could postpone buying in palm and compel them to look at alternatives like soy and sunflower oil.”

Another thing to watch is whether consuming nations, including China and India, will do more to curb excessive price swings or speculation, said Paramalingam Supramaniam, director at broker Pelindung Bestari in Selangor.

Biodiesel and sustainability

Indonesia’s biodiesel mandate will remain an important driver of palm oil prices. The top producer will meet its biodiesel consumption target of 9.4 million kiloliters this year, the Indonesia Oil Palm Plantations Fund Management Agency said Tuesday, as funds from export levies are channeled toward subsidizing biodiesel. The goal for 2022 is 10.15 million kiloliters.

But aggressive palm oil campaigns and a push for deforestation-free products in the European Union will likely curb any growth in demand from the bloc, according to UOB Kay Hian’s Leow. The EU is capping the amount of palm oil directly used as biofuel feedstock at 2019 levels — estimated at around 2 million tons — before phasing it out by 2030.

Meanwhile, increased scrutiny on sustainable finance and on environmental, social and governance criteria will keep palm oil companies and consumer-goods manufacturers vigilant.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.

SUBSCRIBE NOW

You might also like

Tobacco giant to quit Russia

Iran Beaten by Jordan at 2022 FIBA Asia Cup

Yamaha RX100 Will Be Launched In India

PHOTO GALLERY (CLICK TO ENLARGE)

  • Indonesian worker Abdul Rahim Gani, 32, carries oil palm fruits outside Kuala Lumpur in April, 2014. A slump in the number of Indonesian workers applying for jobs in Malaysia's palm oil sector is worsening a labor crunch that industry players say is taking a heavy toll on the export earnings of the world's second-largest grower of the edible oil.  | REUTERS
  • A worker loads palm oil fruit at an oil palm plantation in Slim River, Malaysia on August 12.  | REUTERS

[ad_2]

Source link

Tags: bullscrunchdelugelaborNinaoilPalmroar
Share30Tweet19

Recommended For You

Tobacco giant to quit Russia

by 198 Japan News
April 8, 2025
0
Tobacco giant to quit Russia

Philip Morris, the maker of Marlboro and L&M cigarettes, will give up its presence in Russia by 2023Philip Morris International CEO Jacek Olczak said on Thursday that the...

Read moreDetails

Iran Beaten by Jordan at 2022 FIBA Asia Cup

by 198 Japan News
July 20, 2022
0
Iran Beaten by Jordan at 2022 FIBA Asia Cup

TEHRAN (Tasnim) - Iran basketball team lost to Jordan 91-76 in the quarterfinal round of the 2022 FIBA Asia Cup on Wednesday. - Sports news - Iran's Mohammad...

Read moreDetails

Yamaha RX100 Will Be Launched In India

by 198 Japan News
July 18, 2022
0
Yamaha RX100 Will Be Launched In India

There is one Yamaha product in India that most people know irrespective of age group, generation, mindset, and diversity. Try to guess it. If some other motorcycle other...

Read moreDetails

Iran Victorious over Japan at 2022 FIBA Asia Cup

by 198 Japan News
July 17, 2022
0
Iran Victorious over Japan at 2022 FIBA Asia Cup

TEHRAN (Tasnim) - Iran basketball team defeated Japan 88-76 in the 2022 FIBA Asia Cup on Sunday. - Sports news - Iran's Hamed Haddadi and Behnam Yakhchali scored...

Read moreDetails

Iran Takes Revenge on Kazakhstan: 2022 FIBA Asia Cup

by 198 Japan News
July 16, 2022
0
Iran Takes Revenge on Kazakhstan: 2022 FIBA Asia Cup

TEHRAN (Tasnim) - Iran basketball team beat Kazakhstan 96-60 in the 2022 FIBA Asia Cup on Friday. - Sports news - Iran had recently lost to Kazakhstan twice...

Read moreDetails
Next Post
Full Text: China’s Export Controls

Full Text: China's Export Controls

Market exchange rates in China — Dec. 29

Market exchange rates in China -- Dec. 29

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

  • Trending
  • Comments
  • Latest
Good News stories of 2021: Pandemic heroes, tales of survival, and the legacy of the Tragically Hip

Good News stories of 2021: Pandemic heroes, tales of survival, and the legacy of the Tragically Hip

December 26, 2021
Japanese Wine and Food Pairing in Yoichi, Hokkaido

Japanese Wine and Food Pairing in Yoichi, Hokkaido

January 16, 2022
Russia Seizes Control of Partly Foreign-Owned Energy Project

Russia Seizes Control of Partly Foreign-Owned Energy Project

July 1, 2022
Exotic Markets Launches Dual Currency Note on Solana Blockchain

Exotic Markets Launches Dual Currency Note on Solana Blockchain

May 25, 2022
Global tax reform deal to require U.S. participation to be effective

Global tax reform deal to require U.S. participation to be effective

January 8, 2022
Tensions at an all-time high between Russia, Ukraine | English News | World News | WION

Tensions at an all-time high between Russia, Ukraine | English News | World News | WION

January 29, 2022
FTX to Help Voyager Customers, CEO Says Firm Willing to Deploy ‘Hundreds of Millions’ to Help Crypto Industry – Bitcoin News

FTX to Help Voyager Customers, CEO Says Firm Willing to Deploy ‘Hundreds of Millions’ to Help Crypto Industry – Bitcoin News

0
California governor declares emergency over wildfire near Yosemite

California governor declares emergency over wildfire near Yosemite

0
China accuses Japan of interfering in its internal affairs on Taiwan question

China accuses Japan of interfering in its internal affairs on Taiwan question

0
Kyodo News Digest: July 24, 2022

Kyodo News Digest: July 24, 2022

0
Neymar declares wish to stay at Paris Saint Germain

Neymar declares wish to stay at Paris Saint Germain

0
With an eye on China, Seoul seeks to prevent tech leaks

With an eye on China, Seoul seeks to prevent tech leaks

0
FTX to Help Voyager Customers, CEO Says Firm Willing to Deploy ‘Hundreds of Millions’ to Help Crypto Industry – Bitcoin News

FTX to Help Voyager Customers, CEO Says Firm Willing to Deploy ‘Hundreds of Millions’ to Help Crypto Industry – Bitcoin News

July 24, 2022
California governor declares emergency over wildfire near Yosemite

California governor declares emergency over wildfire near Yosemite

July 24, 2022
China accuses Japan of interfering in its internal affairs on Taiwan question

China accuses Japan of interfering in its internal affairs on Taiwan question

April 8, 2025
Kyodo News Digest: July 24, 2022

Kyodo News Digest: July 24, 2022

July 24, 2022
With an eye on China, Seoul seeks to prevent tech leaks

With an eye on China, Seoul seeks to prevent tech leaks

July 23, 2022
Brands of Baseball Gloves

Brands of Baseball Gloves

July 23, 2022
  • Browse the latest updates from Japan
  • Contact us
  • Cookie Privacy Policy
  • Disclaimer
  • DMCA
  • Privacy Policy
  • Terms and Conditions

Copyright © 2025 198 Japan News.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Browse the latest updates from Japan
  • Landing Page
  • Buy JNews
  • Support Forum
  • Contact Us

Copyright © 2025 198 Japan News.