Home Money & Commodities Palm oil prices seen firming as rising consumption cuts inventories

Palm oil prices seen firming as rising consumption cuts inventories

469
0
Palm

SINGAPORE: Palm oil prices are expected to climb early next year as rapidly increasing consumption and slowing growth in production reduce global stockpiles of the tropical product, a leading analyst said on Wednesday.
Prices of the vegetable oil are forecast to average $570 a tonne, Free on Board (FoB) Indonesia between January and June next year, from $468 a tonne in July, Thomas Mielke, executive director of Hamburg-based newsletter Oil World told an industry conference in Singapore.
“Palm oil prices are undervalued,” he said. “Production growth is slowing down.
Demand for palm oil is accelerating.”
Global consumption of palm oil is expected to rise by 7.3 million tonnes in 2018/19 (October to September), while world production is forecast to rise by 4.2 million tonnes, Mielke said.
Benchmark palm oil prices are up 1.6pc in August, rising for a second month in a row.The market has lost 32pc in the last two years of losses.
Palm oil stocks, which have been rising, are likely to decline in the second half of the year and in 2020, he said.
Still, Malaysian palm oil stockpiles likely rose for the first time in five months, edging up to a three-month high, as production gains outpaced a rise in exports, a Reuters survey showed.
Inventories in Malaysia, the world’s second-largest palm oil producer, are forecast to have gained 1.8pc from the previous month to 2.47 million tonnes at end-July, according to a median estimate of seven planters, traders and analysts polled by Reuters.