Malaysian Palm Oil Wildlife Conservation Fund (MPOWCF)
Palm oil may tumble as much as 7.4 per cent by the end of October as
Malaysian production rebounds and Indonesian growers speed up shipments
because of an export tax, according to Godrej International Ltd.
may decline by RM150 to RM200 a tonne, Dorab Mistry, a director at
Godrej, told an edible oils conference in Mumbai today. The company is
one of India’s biggest buyers of cooking oil.
Palm oil has
jumped 19 per cent from an eight-month low on July 7 this year on
optimism consumption will increase in Asia because of festivals and
excess rainfall may disrupt harvests in Malaysia and Indonesia, the
world’s top producers.
Malaysian inventories climbed 23 per cent
to 1.72 million tonnes in August from July, the country’s palm oil
board said September 15.
“Malaysian month-end stockpiles will rise and prices will need to go lower,” he said.
may remain “sideways with a lower bias for the next four to six weeks.”
Mistry has traded vegetable oils for more than three decades.
December-delivery contract rose 2.1 per cent last week to RM2,701 a
tonne on the Malaysia Derivatives Exchange, climbing for a fourth
Futures may trade between RM3,000 and RM3,200 by
January as India and China, the biggest consumers, begin to rebuild
inventory, said Mistry, who correctly forecast in March that palm oil
would rise in the second half. He said prices may trade between RM3,000
and RM3,200 after June.
“We have seen in history that every El
Nino-inspired bull market has been followed by a very cruel bear
market,” Mistry said, referring to the dryness caused by El Nino and
higher-than-normal rainfall brought on by La Nina.
“El Nino has
been followed almost immediately by a La Nina” this year, impeding a
recovery in global oilseed and oil output, Mistry added.
in Malaysia will drop 2 per cent to 17.2 million tonnes this year and
output in Indonesia may expand by 500,000 tonnes, Mistry said.
Malaysia may produce 17.8 million tonnes,Plantation Industries and
Commodities Minister Bernard Dompok said at the conference September 24.
Indonesia said August 12 that production may fall to 19 million and 20 million metric tonnes, from 21 million in 2009.
vegetable-oil demand will increase by 4.5 million tonnes in the year
beginning October 1, exceeding the 3.8 million tonnes increase in
supply, Mistry said.
India’s vegetable oil imports may increase
to 9.3 million to 9.5 million tonnes in the year beginning November 1
from 9 million tonnes this year, he said. Purchases will include 7.2
million tonnes of palm oil, 1.5 million tonnes of soyabean oil and
400,000 tonnes of sunflower oil, Mistry said.
prices will trade “sideways” to “slightly” lower for the next four to
six weeks and the vegetable oil may become more expensive than palm oil,
he said. – Bloomberg
Source : Business Times
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