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G. Chandrashekhar

THINGS COULD be firm in second half

Kuala Lumpur , Feb. 24

From end-February until May 2006, crude palm oil would trade in a range of (Malaysian ringgit) MYR 1,400-1,600 a tonne, while in May-June, there would be a pressure from South American soyabean oil. However, from July onwards, CPO would be rising to MYR 1,600 and beyond, according to Mr Dorab Mistry.

Speaking at the annual Palm and lauric oils price outlook 2006-2007 conference here, the London-based Director of Godrej International Ltd asserted that at MYR 1,600 for CPO, which would translate to $500 a tonne cost-insurance-freight (c.i.f Rotterdam, the demand for palm oil as a bio-energy product would fall, Mr Mistry said adding that overall, a range of MYR 1,400-1,600 a tonne could be expected with the chance of a super spike in prices, should bullish factors such as adverse weather develop in the coming months. For soyabean oil, he forecast a range of $430-520 a tonne free-on-board, and for coconut oil $550-700 a tonne c.i.f Rotterdam. In his presentation, Mr Mistry said for the second consecutive year, supply increases are not keeping pace with demand increases.

Mr Thomas Mielke, Editor of the Hamburg-based Oil World publication, said biodiesel capacitiesby end-2007 would be 13.5 million tonnes (mt) (of which 5.0 mt in Europe), up from less than 6.0 mt by end-2005 (of which 3.7 mt in Europe).

Mr Mielke said low growth in output in 2006 may prevent palm oil from servicing demand. Mr Mielke's price forecast included MYR 1420-1550 a tonne during March-May period; and MYR 1450-1600 a tonne during June-December.

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