Malaysia sees average 2017 palm price well below current levels

Kuala Lumpur (Reuters): Palm oil prices will this year average between 2,700 and 2,800 ringgit, Malaysia’s minister of plantation industries and commodities said last week.

That would be well below current prices for the edible oil , used to churn out everything from ice cream to shampoo and biofuels, which stood around 3,135 ringgit ($701) on Tuesday afternoon.

“(Palm oil) prices have fluctuated quite substantially ... because there is a lot of offtake by certain countries and production also came down (in 2016),” minister MahSiewKeong said at an industry event.

Palm oil prices averaged 2,741 ringgit in 2016, according to Reuters data. The government in Malaysia, the world’s No.2 producer of the edible oil, gives the average for last year as 2,600 ringgit.

Mah added that he expected Malaysia’s 2017 palm output to grow from the previous year, without specifying figures.

Malaysia produced 17.3 million tons of palm oil in 2016, down 13% from the year before due to dry conditions from a strong El Nino weather pattern.