A day ahead of the annual Palm and Lauric Oils Price Outlook conference organised by Bursa Malaysia, the mood at the event venue is clear. No one is expecting a bull run in palm oil prices in particular and the global vegetable oil market in general.

The drivers of the market including consumption demand, currency, crude oil and weather all point clearly to range-bound trading over the coming months with limited potential for volatility.

Demand growth potential for palm oil is tepid given the mixed picture of world economy. Huge inventory of palm oil plus large stocks of soft oils at the origins and the destinations (mainly China, India) pressure the market down.

The dollar has had a dramatic run in recent months gaining strength and capping the upside for commodities in general.

Most importantly, however, the precipitous slide in crude oil prices – despite some gains recently – has weakened the demand from the biodiesel side. Given this situation, crude palm oil should be trading at around MYR 2,100-2,200 a tonne. But it is not unusual to find punters pushing the rates up closer to the annual price outlook meet in order to create a positive ambiance during the event.

Over a thousand delegates congregated at Price Outlook conference await presentations from reputed speakers including Dr. James Fry, LMC International, Thomas Mielke of Oil World and Dorab Mistry, Godrej International.

YB Datuk Amar Douglas Uggah Embas, Minister of Plantation Industries and Commodities, Government of Malaysia, will deliver the ministerial address.

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