|
|
|
|
National Tree Day Planet Ark Home
|
|
|
||
|
India, Biofuels Will Help Palm Oil Sizzle |
||
|
Mail this story to a friend | Printer friendly version
|
||
| MALAYSIA: March 15, 2007 | ||
|
KUALA LUMPUR - Palm oil prices are set to jump more than 20 percent by year-end as global oilseed stocks get depleted and demand from the food and fuel sectors surges, industry officials said on Wednesday.
|
||
|
Malaysian palm, which gained almost 40 percent last year, could move slightly downward in the near term, but surging Indian food demand and Europe's insatiable appetite for biofuels will ensure the commodity holds on to the gains this year. "I still believe we are in the midst of a rousing bull market whose termination is nowhere in sight," leading industry analyst Dorab Mistry told an annual palm oil conference in the Malaysian capital, organised by the Bursa Malaysia Derivatives Exchange. Mistry, a director of Indian firm Godrej International Ltd., whose forecasts are closely tracked by the global edible oil industry, said palm oil would trade in the range of 2,200-2,400 ringgit per tonne by the fourth quarter of 2007. The market could climb to 2,200 ringgit as early as July. But some analysts said palm oil could come under pressure in the next few months as soybean and palm oil stocks were at comfortable levels. Oilseed stocks could fall next year as smaller crops force users to draw down stocks, they added. "There is a possibility of some downward pressure on prices in the next one or two months," Thomas Mielke of Hamburg-based Oil World told the meeting. Mielke expected crude palm oil futures to trade between 1,850 and 2,050 ringgit per tonne in the first half of the year, with the market likely to remain between 2,000 and 2,250 ringgit in the latter part of 2007. On Wednesday, the benchmark third-month May contract on the Bursa Malaysia Derivatives Exchange ended the morning session at 1,961 ringgit (US$557) per tonne, down 16 ringgit from Tuesday's close at 1,972 ringgit. Analysts said India's palm oil imports are expected to surge from May as rising soyoil prices and a reduction in the country's palm oil duty last month prompt buyers to turn to palm. "We see that India will import almost 1.5 million tonnes more of palm compared with the previous year," Mistry said. "This greater reliance on palm will have significant bearing on the price outlook for palm products." India is expected to buy 6.3 million tonnes of edible oil in the year to October 2007, up from 5.4 million tonnes a year ago. Mistry said India, which reduced import duty on crude palm oil to 60 percent and refined palm oil to 67.5 percent this year, could further slash its tariff again in May. "There is a strong possibility that some time in May, the government will make one more reduction to bring palm oil duty rates down to 50 percent," he said. Industry officials said demand for biofuels would soar in the coming years in Europe and spread to Asia. "The demand will accelerate and spread to other countries like Japan and Indonesia. Renewable energy based on sugar cane or corn or oilseeds has a strong appeal for governments and a seductive charm for politicians," Mistry said.
|
||
|
Story by Sambit Mohanty and Naveen Thukral
|
||
|
REUTERS NEWS SERVICE
|
||
|
