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| CPO prices may rise 21% by March: Mistry |
| BS Reporter / Mumbai Dec 05, 2009, 00:10 IST |
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Crude palm oil (CPO) prices at the benchmark Bursa Malaysia may rise up to 21 per cent by March 2010 amid fears of output loss in Malaysia, the second-largest producer, due to dry weather.
“Given the weakness in the dollar (1.50 against euro), crude oil prices will remain in the range of $70-90 for several months and given the Indian government’s reluctance to levy import duty until April 2010, I believe CPO prices will rise to 2,800-3,000 ringgit ($830.36-$889.67) by the end of the first quarter of the next calendar year,” said Dorab Mistry, head of vegetable oil trading at Godrej International.
Speaking at the Indonesian Palm Oil Conference and Price Outlook 2010 meeting in Bali, Mistry forecast that hot weather would affect Malaysia’s palm yield badly with production falling below 17.5 million tonnes next year. The two successive falls in output would also indicate an end to the high-production cycle, he added.
The developing El Nino also puts a question mark on the production prospects for Indonesia. So far, analysts have expected an increase of at least 2 million tonnes over 2009.
RBD olein would still be the cheapest edible oil in the world in relation to other food and fuel products. The high crude oil prices may put RBD olein at about $900 a tonne freight-on-board.
Soybean plantings and production in South America appear to be on course.
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