A top industry analyst expects stronger demand in the next few weeks as the high production cycle for palm oil slows, translating into higher prices
JAKARTA: Malaysian crude palm oil prices may rise to between RM3,800 and RM4,000 per tonne by end-June on rising demand amid a possible slowdown in production, top industry analyst Dorab Mistry said yesterday. "I believe we are going to see stronger demand in the next few weeks. That will almost certainly translate into higher prices," Mistry said in remarks prepared for a speech at an industry conference. "An important factor will be the trend in crude palm oil production in May and June." Malaysian crude palm oil futures were mostly steady yesterday with the benchmark August contract on the Bursa Malaysia Derivatives Exchange closing RM44 higher to RM3,654 per tonne.
Mistry, who handles vegetable oil buying and trading for Indian firm Godrej, earlier said a squeeze in global vegetable oil supplies is expected to start in October as the high production cycle for palm oil slows, and prices will only rally if adverse weather comes into play.
At the conference, Mistry reiterated his view that the price of the vegetable oil may reach RM4,500 per tonne at some stage between September 2008 and February 2009. "The world is faced with competition for acreage between food grains, feed grains and oilseeds. We cannot escape higher prices," he said. About 90 per cent of palm oil, which set a record in March, is cultivated in Indonesia and Malaysia. - Reuters, Bloomberg
Although Plantation stock have gone up high but investors still can pay attention on small and medium plantation stock like Kim Loong, Rimbunan Sawit, TDM, Kwantas and BLD Plantation.
