MARKET DEVELOPMENT
CPO Price In 2015 To Average US$770 Per Tonne, Indonesia Major Swing Factor
CPO Price In 2015 To Average US$770 Per Tonne, Indonesia Major Swing Factor
05/03/2015 (Bernama) - Crude palm oil (CPO) is expected to trade at an average of US$770 (US$1=RM3.62) per tonne in Rotterdam this year supported by low stocks and renewed demand from India and China.
"The price is seen rising moderately as long as production remains low," Thomas Mielke, Editor of Hamburg-based newsletter 'Oil World', said at the Palm & Lauric Oils Conference and Exhibition here Wednesday.
The leading analyst, who is also Executive Director of ISTA Mielke GmbH, was speaking on 'Global Supply, Demand & Price and Outlook of Palm Oil and Other Edible Oils' on the last day of the three-day conference.
He also projected Malaysia's cpo production to touch 19.8 million tonnes in Malaysia while Indonesia's output was estimated at 32.9 million.
"The major swing factor will be the biodiesel consumption in Indonesia.
"I currently assume that the total Indonesian biodiesel production will increase to between 3.1 and 3.4 million tonnes in 2015," Mielke said, adding that average RBD palm olein (free-on-board) price was estimated at US$750 per tonne while soyoil Rotterdam was expected to hover around US$850 per tonne.
Meanwhile, Dorab Mistry, Director, Godrej International Ltd, also opined that Indonesia's consumption of biodiesel would be key to CPO prices in 2015.
"2014 was a great year for consumers but a bad year for producers. There is some relief for producers now but after six months prices may fall again. The big question mark is Indonesia's palm bio-diesel consumption," he said.
The third month cpo futures contract on Bursa Derivatives is forecast to increase to RM2,500 per tonne by May 2015, assuming that Brent crude hovers between US$50 and US$70 per barrel, US dollar remains stronger, palm oil production under performs and stocks remain in short supply.
He said the rise would unfold as the market realised the shortfall in production and stocks dwindling to unforeseen levels in Malaysia.
The third month May futures contract ended at RM2,378 per tonne yesterday.
He also said RBD palm olein would fetch about US$725 per tonne in the near future.
"After July, when production picks up, I expect cpo prices to start declining and may even fall to as low as RM2,100 per tone while that of RBD Palm Olein to US$600 per tonne by December," he said.
Unlike Mielke, who predicted that palm oil production would expand to 19.8 million tonnes in 2015, Mistry believed Malaysia would produce, at best, last year's output of 19.7 million tonnes.
"The price is seen rising moderately as long as production remains low," Thomas Mielke, Editor of Hamburg-based newsletter 'Oil World', said at the Palm & Lauric Oils Conference and Exhibition here Wednesday.
The leading analyst, who is also Executive Director of ISTA Mielke GmbH, was speaking on 'Global Supply, Demand & Price and Outlook of Palm Oil and Other Edible Oils' on the last day of the three-day conference.
He also projected Malaysia's cpo production to touch 19.8 million tonnes in Malaysia while Indonesia's output was estimated at 32.9 million.
"The major swing factor will be the biodiesel consumption in Indonesia.
"I currently assume that the total Indonesian biodiesel production will increase to between 3.1 and 3.4 million tonnes in 2015," Mielke said, adding that average RBD palm olein (free-on-board) price was estimated at US$750 per tonne while soyoil Rotterdam was expected to hover around US$850 per tonne.
Meanwhile, Dorab Mistry, Director, Godrej International Ltd, also opined that Indonesia's consumption of biodiesel would be key to CPO prices in 2015.
"2014 was a great year for consumers but a bad year for producers. There is some relief for producers now but after six months prices may fall again. The big question mark is Indonesia's palm bio-diesel consumption," he said.
The third month cpo futures contract on Bursa Derivatives is forecast to increase to RM2,500 per tonne by May 2015, assuming that Brent crude hovers between US$50 and US$70 per barrel, US dollar remains stronger, palm oil production under performs and stocks remain in short supply.
He said the rise would unfold as the market realised the shortfall in production and stocks dwindling to unforeseen levels in Malaysia.
The third month May futures contract ended at RM2,378 per tonne yesterday.
He also said RBD palm olein would fetch about US$725 per tonne in the near future.
"After July, when production picks up, I expect cpo prices to start declining and may even fall to as low as RM2,100 per tone while that of RBD Palm Olein to US$600 per tonne by December," he said.
Unlike Mielke, who predicted that palm oil production would expand to 19.8 million tonnes in 2015, Mistry believed Malaysia would produce, at best, last year's output of 19.7 million tonnes.