Palm oil at 1,500 ringgits for next few weeks: Mistry

Crude palm oil futures will trade around 1,500 ringgits a tonne (Rs 20,453) for next 8-10 weeks, commodity expert and director of Godrej International Ltd Dorab Mistry said on Thursday.

“I believe palm oil has found a good support at 1,500 ringgits and should trade around this level for the next eight to 10 weeks.” Mistry said in a paper presented at an international palm oil conference in Indonesia. Palm oil futures on Bursa Malaysia Derivatives exchange today gained 37 ringgits to settle at 1,499 ringgits. Indonesia and Malaysia are major palm oil producers in the world.

He also said from December onwards palm oil production will slow down as palm trees will undergo a change of biological cycle after a series of production. Therefore, the gap between palm oil and soyoil prices would narrow down.

In India, spot refined soyoil today quoted around Rs 45,000 a tonne, much higher than Rs 34,000 a tonne for refined palm oil. He predicted that India might impose import taxes on crude palm oil and the level of import duties will determine the import volume for palm oil. “I except import duties (on crude palm oil) to rise as the plight of Indian farmers rise,” he said.

India is the major buyer of vegetable oils like soyoil and palm oil after China. But Mistry said demand for palm oil from Middle East is also growing and will result in demand growth of the oil.

Soyoil
“There are more bearish factors for than bullish factors as far as soyoil is concerned,” Mistry said in his paper. Suitable weather condition in major soybean growing countries like Brazil and Argentina, higher carry over stocks of soybean in Argentina and falling soymeal prices in global markets are behind the failure of the soyoil market, he said.