Fitch Ratings expects higher global vegetable oil output to drive a decline in crude palm oil (CPO) prices to below USD1,/tonne (t) in 2H22, after averaging at around USD1,/t in 1H22.
CPO prices dropped by over /t since early June following a policy shift in Indonesia to encourage exports by reducing export levies. We expect continued output growth in Indonesia to exert further pressure on prices.
A reinstatement of export curbs by Indonesia to ensure adequate domestic supply and lower supply of substitute sunflower seed oil from Ukraine are key upside risks for CPO prices.
