By Mei Mei Chu

KUALA LUMPUR – China is now the largest palm oil buyer in the world. However, they are facing an economic slowdown and the pursuit of a zero-COVID strategy, Dorab Mistry, an edible oil analyst, said Wednesday.

Mistry, the director of Godrej International in India, spoke at the Globoil conference. “China might not be the steam generator for world growth.”

The global economy and supply chain have been affected by strict lockdown measures in China to stop a COVID-19 epidemic. Some factories were forced to close, while delays at ports increased.

Mistry indicated that commodity consumption will be less in the country with the largest population this year.

Mistry’s forecast of Malaysia’s 2022 palm-oil production was unchanged at 19,000,000 tonnes. Indonesian production, however, is expected to rise by at least 2,000,000 tonnes.

His price prediction for crude palm oil futures was also kept by him. He predicted a drop to 5,000 Ringgit ($1,140.90 a tonne) by June, and then to 4,000 Ringgit ($912.72) in September.

Malaysia’s benchmark market prices reached all-time highs at 7,268 ringgit ($1,658.41), this year after Russia invaded Ukraine, which disrupted sunflower oil shipment. Indonesia’s ban on palm oil exports also tightened global supply.

Mistry stated that prices can drop sharply after an Indonesian ban is lifted and the Ukraine conflict is over. “After the Ukraine conflict has been resolved, interest rates rise so production picks back up. Stocks around the Black Sea will also be unfrozen.”

($1 = 4.3825 ringgit)