Crude Palm Oil Could Jump by 10 pct in Jan-March

Bareksa.com -  Crude palm oil export prices in Indonesia, the world's biggest producer, could rise as much as 10 percent to $750 per tonne in January-March 2015 because dry weather in the top two producing countries is expected to moderate production growth, leading analyst Thomas Mielke said on Sunday.

"Oil palm growing areas are suffering from dryness in Indonesia and Malaysia. If we get continuation of dryness in October, then oil palm will be stressed," said Mielke, editor of the Hamburg-based newsletter Oil World.

"It could reduce the number of fruit bunches in coming months," he told the Globoil India industry conference.

Crude palm oil could trade in a range of $730-$750 per tonne in the first quarter of 2015 from $680 per tonne now, he said.

Malaysian palm oil futures settled at 2,177 Malaysian ringgit ($668.40) per tonne on Friday, after hitting a 5-1/2-year low at 1,914 ringgit on Sept. 2.

"Vegetable oil prices have bottomed out ... growth in palm oil production would be just 2 million tonnes, or the lowest in 5 years, in 2014/15," Mielke said.

Palm oil stocks will drop significantly by the end of September 2015 because top producers Indonesia and Malaysia have allowed duty free exports, he said.

Malaysia has allowed duty free exports of crude palm oil for September and October. Indonesia has allowed duty free exports for October in response to the Malaysian duty structure.

Despite an expected bumper supply of soybeans from the United States and South America, soyoil prices could rise due to an expected drop in the production of other oilseeds like rapeseed, sunflower and groundnut.

"Soybean oil cannot alone prevent a deficit in other edible oils," Mielke said.

He forecast soyoil prices in Argentina in a range of $820-$850 per tonne in Jan-March from $775 per tonne now.

Higher demand from the bio-fuel industry was depleting soyoil stocks in the United States and South America, he said. (Source : Reuters)