Due to the oversupply of palm oil in the year 2018-2019, the market price of crude palm oil (CPO) went to a historic low. The governments of world’s two major palm oil producers, Malaysia and Indonesia, try to lift up the price at this moment by using policies such as biodiesel mandate and a moratorium on expanding the oil palm plantations. However, this article explains that a structural palm oil shortage may come in the near future. In order to analyse the reasons for this structural palm oil shortage and when it will occur, this article employed the age profiles of Malaysian and Indonesian oil palm plantation as well as the yield profile of oil palm. Using these age profiles and yield profile, this article can infer the palm oil production in the near future. According to the method used in this article, even without any weather effects, the supply of palm oil will decline in the future.
Keywords: palm oil, replanting, supply outlook, price outlook, Malaysia, Indonesia