Bearish conditions in palm oil market set to continue – analyst

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)

By: Neha Popat
+44 208 652 3214

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index