Published on: Friday, April 08, 2005 |
PUTRAJAYA: Palm oil prices may move beyond RM1,650 per tonnes in the second half of this year should supply be adversely affected by the recent dry season or if mineral oil prices continue to stay above US$50 per barrel, said a Germany-based consultant Thomas Mielke.
Mielke is the director of Ista Mielke GmbH, an independent research organisation that publishes Oil World. Oil World is an online global market report for oilseed and oils that is accessible on subscription basis at www.oilworld.biz.
Palm oil production could be affected by the recent dry condition in palm oil producing countries of Malaysia, Indonesia, Thailand and parts of the Philippines and thus might result in positive effect on prices, he said.
Speaking to Bernama on the sidelines of Malaysian Palm Oil Board's (MPOB) seminar in Kajang, near here, Mielke said he was preparing a new estimate for Malaysia's palm oil production this year from his February's forecast of 14.7 million tonnes.
On the demand side, he said continued rally in mineral oil prices might force a rising number of industrial consumers to switch to palm oil as substitute to mineral-base fuel.
He said in Europe imports of Malaysian palm oil as biofuel had just started about a month ago.
"From June onwards, I see a strong world demand for Malaysian palm oil against the outlook of slower growth in Malaysia's production due to declining yield per hectare.
"My tentative forecast is that European import of Malaysian crude palm oil and palm oil products as biofuel could be 600,000 to 800,000 tonnes in January to December 2005 or even more compared with almost zero in 2004," he said.
Despite the upbeat outlook for palm oil prices, he said bumper crops of soybeans, rapeseed and cottonseed could cause moderation in the price rise in the near term.
Turning to lauric oil markets, consisting of palm kernel oil and cocount oil, where prices were tightening, Mielke said it was not expected to change due to the declining coconut oil production.
"Output will be down for the fourth consecutive year this season due to negative development in the Philippines and the small production in Indonesia.
"Palm kernel oil output will continue to rise but the overall world production of coconut oil and palm kernel oil can hardly cover demand for oleochemical industries," he added.
On the growing oil and fat's usage as biofuel and their growing traditional demand by industrial and household consumers, he said growth in supply is not keeping up with demand.
"World demand of oil and fats is expected to show an unprecedented growth of 6.0 million tonnes this season (Oct'04 to Sept'05), the biggest growth in history as compared with 4.1 million tonnes last season."
"The world will have difficulty in expanding production sufficiently within the next one or two years," said Mielke. - Bernama
