Crude palm oil futures on Malaysia’s derivatives exchange settled little
changed Wednesday after trading sideways on the back of mixed cues from leading
oilseed analysts at an industry event in Kuala Lumpur that concluded today.
The benchmark May contract at Bursa Malaysia Derivatives settled 1 ringgit
lower at 2,399 ringgit a metric ton after moving in a tight range of
MYR2,389-MYR2,413/ton.
Palm oil prices could decline to MYR2,200/ton or even lower from mid-April as
the harvest season for soy crops starts in South America, while inventory levels
in major vegoil-consuming countries are also near record highs, said analyst
Dorab Mistry, who is Godrej International Ltd.'s London-based head of edible-oil
trading.
"South America is on course to produce about 140 million tons of soybeans in
2013. This is almost 30 million tons more than in 2012," he said.
Mr. Mistry said soyoil prices will likely follow palm oil's downward
trajectory and could ease to $900/ton by July, when South America wraps up its
soy harvesting season.
But James Fry, chairman at London-based agri-consultancy firm LMC
International Ltd., was more upbeat about the outlook for palm oil.
"Price signals are giving encouragement to the use of palm methyl-ester as
fuel in direct competition with fossil diesel…many factors have reinforced the
attractions of CPO as a competitive source of fuel in recent months," he said,
adding that palm oil's improving appeal as feedstock for alternative fuels may
ease stockpiles and provide underlying support for prices in the coming months.
Mr. Fry tipped palm oil to trade at MYR2,625/ton if Brent crude trades near $105
a barrel by June.
"With [Malaysia's] export taxes in place, palm oil stockpiles will fall to
1.8 million-1.9 million tons mid-year," he said.
Inventories in Malaysia as of end-January were over 2.5 million tons,
industry regulator the Malaysian Palm Oil Board said last month.
Traders now await Malaysia's palm oil production, inventory and export data
for February from the MPOB as well as March 1-10 palm oil shipment data from
cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. due next week.
No comments:
Post a Comment