Palm Oil Sector in 2019: A long or short reprieve?

Must Read

PZ Cussons commences entries for Cussons Baby Moments’ 6th season

PZ Cussons has announced the commencement of entries of the 6th season of its eponymous baby competition in Nigeria tagged...

List of Guaranty Trust Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number which usually identifies both the bank and the branch where an account is...

Ankara Styles For Slim Ladies: Top 5 Looks You Must Try! (Pictures)

Today’s fashion of Nigeria shows off plenty of Ankara styles for slim ladies, that will help them to create a...
- Advertisement -
2018 was largely a challenging year for oil palm players as local FX liquidity,  declines in global Crude Palm Oil (CPO) price and a continued porous border, encouraged the smuggling and importation of CPO. Thus, listed players on the Exchange (OKOMUOIL and PRESCO), struggled to grow their revenue. In 9M-18, OKOMUOIL posted a meagre 0.5%y/y growth in revenue while PRESCO lagged, recording a 4.0%y/y decline.
Looking into 2019, we expect players to continue to benefit from favourable government policies and cheaper loans. Thus, we see room for further production expansion. On the other hand, the outlook for global CPO price is relatively favourable for the local players as droughts recorded in key producing areas in Indonesia and Malaysia in H2-18, are expected to drag global supply.
Furthermore, anticipated increases in demand from India – one of the largest consumers of CPO – is expected to
buoy prices higher, predicated by a reduction in import duties for CPO in India. However, an expected EU (world’s second largest palm oil importer) ban on palm oil by 2030, under the Renewable Energy Directive (RED), posts a gloomy future for exporters in the long term, as palm oil is a major feedstock for biofuels.
Overall, we see slightly higher global CPO prices in 2019. We also expect this to translate to local prices, as the expected slight depreciation of the naira in 2019 should make CPO imports a little less attractive.
- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest News

Samsung Presents Galaxy A10s, A20s and A30s For New Smartphone Generation

Samsung yesterday unveiled new members of the Galaxy A Series smartphones – the Galaxy A10s, A20s and A30s. These...

Federal Govt & World Bank To Debate $3 Billion Power Sector Loan

Ndubuisi Francis, Obinna Chima, Kunle Aderinokun, Nume Ekeghe and Nosa Alekhuogie in Washington DC. The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed,...

CBN Issues Part Of N499 Billion Credit Penalty To Banks

The Central Bank of Nigeria (CBN) had Issued to some banks part of the N499,175,535,097 subtracted from 12 banks as additional cash savings after...

Yankee Candle Celebrates 50 Years of Candle-Making and A ‘Scent-Evoking’ 10 Years in Singapore

SINGAPORE - Media OutReach - 18 October 2019 - Yankee Candle®, America's best-loved candle, celebrates its 50th anniversary and ten years in Singapore this year. Founded by Mike Kittredge in 1969, Yankee...

More Articles Like This