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The palm oil sector is anticipated to experience upward growth in the second half of the year 2023, which is directed by various commercial factors. The agreement between the United Kingdom and the Comprehensive and Progressive Agreement for Trans-pacific Partnership (CPTPP) is expected to enable new trade opportunities for the export activities of palm oil. Along with that, the improvements seen in the labour conditions in the overall industry can prompt the rate of production and efficiency.

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The ongoing devaluation of the Malaysian ringgit versus the US dollar, which is currently trading at around RM 4.57, is seen as a beneficiary aspect for palm oil exportations. The industry regulator Malaysian Palm Oil Board have stated that the depreciation of the ringgit against the US dollar would act as a catalyst in gaining demand for crude palm oil. It is predicted that this would help to maintain the prices firmly during the upcoming period, which may exceed up to RM 4000 per tonne.

Additionally, the withdrawal of Russia from the grain deal has affected the exportation capacity of Ukraine's sunflower oilseeds and oil, boosting the demand for palm oil on a large scale. The last week has accounted for the crude palm oil (CPO) trades to close at above RM 4000 per tonne, despite the uncertain situations faced by Ukraine grain exports.

The director-general of MPOB has mentioned that the price of CPO is expected to mark stability until the end of the year. However, the occurrence of El Nino in the second half of the year 2023 may decrease the production of palm oil by one to three million tonnes in the following year. The physical factors, like the development of the inflorescences, might get affected by El Nino, which would impact palm oil production and is expected to be seen during 2024.

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On the other hand, the managing partner of SPI Asset Management, Stephen Innes, believes that the palm oil sector will benefit from the UK's agreement with the CPTPP. The tariffs imposed by the UK on imports are expected to decrease to zero, which was marked at 12% before the agreement. This would increase palm oil exports while strengthening the trade between the two countries in the upcoming year.

According to Procurement Resource, the palm oil sector is expected to witness upward growth in the second half of 2023. This anticipation results from several commercial factors, which primarily beholds the agreement of the United Kingdom with CPTPP, along with the depreciation of Malaysian ringgits over the US dollar, which would benefit the palm oil sector in the upcoming year.