Business Standard

Palm oil prices to rise 15% by June-end: Mistry

Related News

may gain 15 per cent by the end of June, according to Ltd’s Dorab Mistry, restating a year-long call for a rally to 4,000 ringgit ($1,302) a tonne after prices dipped.

“I am very happy to reiterate my forecast,” Mistry said in an e-mailed response to questions. The Godrej director, who has correctly forecast price trends over the past year, has been predicting a rally to that level since at least March 2011. Ltd, the world’s biggest palm oil processing company, is Mistry’s favourite palm stock, he said.

While prices in Malaysia have climbed 9.5 per cent this year, in line with Mistry’s outlook, they’ve fallen 4.2 per cent since April 10 amid concern the global recovery may be at risk as economic growth in China slows and the European debt crisis worsens. Shares in Wilmar International, which have dropped over the past 12 months, are “good value,” he said.

“My price forecasting is based on fundamentals of supply and demand and these have not changed,” he wrote. “In fact, is underperforming more than my model had suggested,” referring to crude palm oil by its initials.

Palm oil for July delivery ended little changed at 3,477 ringgit on the Malaysia Derivatives Exchange yesterday, the lowest close for the most-active contract since March 30. That’s down from a 13-month high of 3,628 ringgit on April 10.

“Currently, the macro picture is undergoing a reassessment and that has led some players to de-risk,” said Mistry, who’s traded palm oil for more than three decades. “This sentiment changes from time to time, and as time goes by, each such change lasts for a shorter duration. Time will tell.”

Cooking oil
Last year, Mistry predicted that the price of the world’s most-consumed cooking oil, which is used to make instant noodles and candy, would bottom out at about 2,800 ringgit before rebounding. Its lowest price was 2,754 ringgit on October 6. Chandran Sinnasamy, trading head at Kuala-Lumpur based LT International Futures (M), said last month that his views are respected by the industry.

China, the biggest user of cooking oils, reported lower- than-expected gross domestic product growth in the first quarter, raising concern that commodity demand may slow. Europe’s resurgent debt crisis has also roiled equity and commodity markets as government bond yields climbed.

Production of palm oil in Malaysia and Indonesia in January and February fell slightly short of forecasts, Mistry said in a speech in Beijing on March 27. The two countries are the world’s largest producers.

Malaysian output
In March, Malaysian production was 1.21 million tonnes, according to the nation’s palm oil board. That’s 14 per cent lower than a year ago and 2.1 per cent more than February. Malaysia had a so-called high cycle of production in 2011, resulting in record output of 18.9 million tonnes. A so-called low cycle that began in January meant output would range between 18.6 million tonnes and 19 million tonnes in 2012, Mistry said March 7.

Read more on:   
|
|
|
|
|

Read More

Barley futures up on firm physical cues

Barley prices rose in futures trade today by Rs 41.50 to Rs 1,682.50 per quintal, as traders enlarged their holdings tacking demand cues from the ...

Quick Links

 

Market News

Petrochemicals prices start correcting

Polyester yarn industry worst affected, bearish outlook for benzene

Brent crude near $95 a barrel but worst seen over

Brent fell on Tuesday by the most since January 2 to $94.67 a barrel

FMC to make electronic contract note a part of KYC

ECN is electronic contract note. A contract note is a confirmation of trade in equity shares completed on a particular day for, and on behalf ...

Steel firms cautious on price cuts

But JSW Steel cuts prices by Rs 500-1,000 per tonne to compete with imports

Khadi sales register 6 per cent growth in 2013-14

Sale of khadi, a hand-woven cloth, registered a 6 per cent growth in 2013-14 across the country, while the gain in production during this period ...

Back to Top