NEW DELHI: The price of Malaysian crude palm oil (CPO) could rise to the RM2,800-RM3,000 level per tonne by the end of the first quarter of 2010 on higher global demand, an industry expert said.
Dorab Mistry, director of Godrej International Ltd London, said global demand would rise by 5.5 million tonnes and price of palm oil would rise higher compared to other vegetable oils.
“I believe CPO prices must rise very soon. Between now and the end of the first quarter to 2010, I expect CPO futures on Bursa Malaysia to rise to a level between RM2,800 and RM3,000.
“That would put RBD Olien at about US$900 (RM3,087) FOB by the end of January 2010,” he said at the Malaysia-India Palm Oil Trade Fair and Seminar last week.
Currently, the commodity’s price hovers around RM2,500 per tonne.
With more of China’s and India’s rural population crossing the US$1,000 (RM3,500) per capita income, a massive demand for edible oil would eventually be created, Mistry said.
China and India are two world’s largest importers of edible oil.
India’s imports of palm oil had crossed eight million tonnes this year.
Mistry also predicted Malaysia’s production to dip due to El Nino – the high cycle started in September this year and will end in April/July 2010, resulting in fatigue of trees and farmers begin replanting programme, where about 100,000 hectares would be affected.
He expected Malaysia’s CPO production to be less than this year’s 17.5 million tonnes, while Indonesia’s output in 2010 would only rise between one million and 1.5 million tonnes due to the weather phenomenon.
Indonesia and Malaysia are the top two producers of palm oil. – Bernama Source: Business Times]]>