05/03/2013 (Hindu Business Line) - The mood here in Kuala Lumpur for the annual palm and lauric oil price outlook is somewhat sombre, unlike in the recent years.

The reasons are clear. Producers are bracing themselves for further downward correction in crude palm oil prices.

Malaysia and Indonesia, world’s largest producers and exporters, are already nursing tank-bursting levels of stock, some estimates placing it as high as 10 million tonnes.

Exports have turned sluggish because major destinations such as China, India and Pakistan are holding a huge inventory.

Record soyabean harvest ready in South America, mainly Brazil and Argentina, is exerting supply pressure which further exacerbates the weakness in the palm complex.

So, both demand side and supply side do not favour firm prices. Almost every serious trader is agreed that the next stop for crude palm oil is 2,000 Malaysian ringgit a tonne from the current level of ringgit 2,400. It is in this background that this year’s palm oil price outlook will be discussed.

The theme for the year is: Price volatily - ride it, manage it. Organised by Bursa Malaysia, the conference has lined up a number of eminent speakers who will share their thoughts on the emerging palm oil market scenario, oleochemical market, biodiesel market and lauric oils market.

It will culminate in price outlook for 2013.

Malaysia Palm Oil Rates
Meanwhile, the benchmark May contract on the Bursa Malaysia Derivatives Exchange gained 1.8 per cent at 2,411 ringgit ($776) a tonne on Monday. Prices traded in a tight range of 2,375-2,415 ringgit.

Vikram Global Commodities, Chennai, quoted Malaysian super palmolein at Rs 565 ex-Chennai.