The median survey of 13 traders, analysts, refiners and producers, was carried out at the Palm and Lauric Oils Conference & Exhibition Price Outlook 2011 this week.
Palm oil prices have surged over the past 12 months, on concerns that seasonally heavy rains have stalled harvesting in top producers Indonesia and Malaysia, and major soyoil-exporting countries have suffered dry weather. "The run up has been due to the last year of seeing weather impacting the market in all crops including palm," Chris De Lavigne, vice president of Industrial Practices at Frost & Sullivan told Reuters. The benchmark May 2011 crude palm oil contract on Bursa Malaysia Derivatives hit a two-week high at 3,700 Malaysian ringgit ($1,220) a tonne on Monday. Benchmark palm oil prices have gained around 30 percent during the last 12 months, with fund buying and speculative trading helping support prices.
Traditionally, prices come under pressure in the second half, as the key harvest period in top producers Malaysia and Indonesia, kicks in. On Tuesday, Indonesia's weather bureau said the country will see the start of dry season in most areas around May-June, earlier than the previous forecast of July and offering a timely boost to the farm sector. "Supply to recover in the second half of 2011, returning to a strong growth path in 2012," said Ling An Hong, an official with Ganling - a plantation firm in Malaysia side of Borneo island.
"Demand will continue to be robust due to energy demand and stronger consumption in China, and India," he added. Last week, benchmark palm oil prices climbed about 4 percent, as investors eye growing demand for biodiesel after tension in the Middle East boosted crude oil.
Investors fear that violence and supply disruptions may spread to other countries in the region, though assurances from OPEC members of ample spare capacity eased anxiety about export losses from Libya, helping Brent crude to fall for a third day to below $113 on Wednesday.
Although less likely to be channelled into biofuels due to a lack of government subsidies, mandates in Brazil and the United States may see more soyoil taken up, which could create a vacuum for palm oil in the food sector. "In 2010, the most important price-making factor was the delayed effect of the El Nino and the problems in CPO production," leading industry analyst Dorab Mistry said. "In 2011, the most important price-making factor will be energy prices and their effect on biodiesel," he added. "We must be prepared for volatility like we have never experienced before." Below is the question and responses. Q.
What will be the average price forecasts for palm oil in 2011?
2,900 ringgit -- one respondent 3,000 ringgit -- two respondents 3,100 ringgit -- one respondent 3,200 ringgit -- one respondent 3,300 ringgit -- four respondents 3,500 ringgit -- two respondents 3,700 ringgit -- one respondent 3,850 ringgit -- one respondent For the latest updates PRESS CTR + D or visit Stock Market news Today
No comments:
Post a Comment