Malaysian Palm Oil Wildlife Conservation Fund (MPOWCF)
Palm oil prices can hit RM3,600 a tonne as soon as in the first half of
next year, traders say, which would be their highest since 2008 as
demand continues to be robust, while supply is hit by erratic weather.
“In the next six to nine months, palm oil prices should trade at
around RM3,600 per tonne, if all fundamental factors remain the same,”
said NextView Sdn Bhd chief market strategist Benny Lee.
He attributed the increase in palm oil prices since July to a weaker US dollar and a stronger yuan.
The last time palm oil prices hit their all-time high, at RM4,486 per tonne, was in mid-2008.
Lee was presenting his take on palm oil price movement at the
International Palm Oil Trade Fair and Seminar 2010 in Kuala Lumpur
he foresees several pullbacks and corrections in the pricing in the
immediate weeks, Lee was of the view that it will move towards RM2,800
and possibly surpass RM2,950 by the end of the year.
palm oil futures on the Malaysian Derivatives Exchange gained RM29 to
close at RM2,705 per tonne. The day before, it fell to a two-week low
due to sell-off in the grains markets after a report of huge US corn
India-based Transgraph Consulting Pvt Ltd chief
executive officer P.V. Murali Krishna, also present at the event, was
bullish on palm oil in the next six months.
“The current price
strength is supported by a relative shortage in oil crop output as a
result of erratic weather patterns. There’s excess rain in the Indian
continent but acute dryness in South America. North America has had
experienced frost and Europe is not getting enough rain,” he said.
Rapid urbanisation in China and India has resulted in lower
agriculture activities, forcing these emerging economies to rely on
vegetable oil imports.
Malaysia and Indonesia, the world
biggest palm oil supplier, stand to gain from the increasing appetite
for food from the world’s two most populous nations.
“The focus is on Asia. China and India’s robust economy and growing population is set to consume palm oil,” Murali said.
Source : Business Times
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