[Back]   [Comments]  [Print]

NEWS ADMIN

Mahamad Rodzi Abdul Ghani

DATE

11/11/2002

NEWS PROVIDER

Mahamad Rodzi Abdul Ghani

NEWS SOURCE

NULL

CATEGORY

HEADLINE

OIL WORLD SEES RISING PALM OIL PRICES
HAMBURG, Nov 4 (Reuters) - Palm oil prices are likely to reach 1,700 to1,800 Malaysian ringgit a tonne in the coming months because of tightsupplies of all vegetable oils and strong demand, Thomas Mielke, editor ofHamburg-based newsletter Oil World, told Reuters."We expect palm oil prices to continue to appreciate in November andDecember and probably reach 1,700 to 1,800 Malaysian ringgit a tonnesometime in January to March 2003," he said on Monday.Malaysian palm oil for January delivery was at 1,564 ringgit a tonne atFriday's close in Kuala Lumpur, where markets were closed on Monday for apublic holiday.Palm oil prices would rise on tightening world edible oils and fatssupplies and a likely decline in Malaysian palm oil production betweenOctober this year and March 2003 compared with the same period lastseason, Mielke added.The decline could be as much as 200,000 tonnes, partly because ofbelow-average rainfall.Oil World estimates global palm oil production at 25.14 million tonnesin 2002/03 (Oct-Sept), still up from 24.64 million last season.But it sees 2002/03 consumption rising strongly to 25.71 million tonnesfrom 24.68 million last season.Strong global demand means stocks in Malaysia and Indonesia, the twodominant exporters, will decline from now to March 2003, lending furtherprice support.Mielke said palm oil prices had been slower to rise than soyoil butwere likely to increase more quickly in coming months."I do not think the discount in the price of palm oil is justified," hesaid. "A further rally, probably a substantial one, is likely in palmoil."He added: "The big question is whether the market will react now oronly after confirmation that supply is slowing further."Falling soybean output in the United States and tight supply ofrapeseed and other products had left the market depending on SouthAmerican soy production.If unfavourable weather reduced the South American crop below currentestimates, the result would be rapidly tightening global oilseed supplyand rising prices.