Monday, 10 November 2014 00:00
Reuters: Palm oil futures could rise to between 2,300 ringgit ($ 703) and 2,500 ringgit per ton in the first quarter of next year, leading vegetable oil analyst Thomas Mielke said.
Benchmark palm oil futures are currently trading at 11-week highs of around 2,234 ringgit.
“My forecast for January to March is for crude palm oil futures at 2,300-2500 ringgit, but if energy prices appreciate, then the stage is set for higher prices,” Mielke, editor of Hamburg-based newsletter Oil World, told a palm oil industry conference in Kuala Lumpur.
But he said that if crude oil prices fell to $ 75 a barrel or lower, palm prices could drop, too. However, palm oil prices are unlikely to drop below 2,000 ringgit a ton, he added.
At the end of September, Mielke had forecast crude palm oil export prices in Indonesia, the world’s biggest producer, could rise to $ 730-$ 750 per ton in January-March 2015 due to a slowdown in production growth.
On Wednesday he said consumption of palm oil would probably outpace global production, seen rising by only 2 million tons in the year from the October 2014 to September 2015 due to dry spells in major palm-growing regions in Southeast Asia.
That is expected to help reduce stockpiles and support the price of palm, the world’s most traded vegetable oil.
“For Malaysia, we expect production to decline from a year ago ... We are not optimistic for 2015 because of the late effect of the dryness we saw in early 2014,” he said, adding that “very dry weather” in the Sumatra and Kalimantan regions of Indonesia could also result in lower yields.
Mielke sees Malaysian palm oil production in the October 2014 to September 2015 period at 19.8 million tons, while Indonesian production is seen at 31.9 million tons.