06 March 2013 10:42 [Source: ICIS news]
KUALA LUMPUR (ICIS)--“Short-term pain has to be borne for long-term gain,” said Dorab Mistry at the Palm and Lauric Oils Conference and Exhibition Price Outlook (POC) on Wednesday.
Delivering his price outlook for 2013, the director of India-based oleochemical manufacturer Godrej told delegates at the conference in Kuala Lumpur that the bearish market conditions could worsen as a result of greater palm oil supplies.
Mistry estimated Malaysian crude palm oil production in 2013 will be 19.5-19.7m tonnes, while Indonesia’s production could top 30.5m.
As a result, Mistry expects palm oil prices on the Bursa Malaysia Derivatives to slide to Malaysian ringgit (M$) 2,200/tonne ($710/tonne, €543/tonne) in April. This could decline further as a result of increased palm oil output in July and August.
Mistry did not anticipate prices falling below M$1,800/tonne unless Brent crude oil prices dropped below $80/bbl.
The POC is considered a key event in the oleochemical calendar.
Participants discuss future feedstock pricing during the event, and in the weeks after prices tend to follow the sentiment within the market.
As a result, fatty alcohol buyers have opted to stall second-quarter negotiations until after the POC.
Many are now anxiously awaiting developments in the feedstock market before deciding on their strategy.
($1 = M$3.10, €1 = M$4.05)
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections