23 Jan 2019 (S&P Global Platts) - Singapore — Palm oil would remain bearish in 2019 with some support in Q1, Rabobank's latest commodities price forecast report released Tuesday showed.

The expectation of bearish prices was the result of burgeoning palm oil inventories in both Indonesia and Malaysia, although an anticipated El Nino in Southeast Asia and higher demand from China and India may dull the effect of a bear market, the report said.

The report stated that there was a 65% chance of an El Nino forming, although the intensity of the phenomenon is not known.

Since El Nino brings dry weather to the region, it could lead to lower palm oil production in Q1 2019 for Southeast Asia.

The report expected palm oil demand from India and China to be healthy. India's edible oil imports in December increased by 6.7% month on month to 1.15 million mt.

In early January 2019, however, Indian edible oil port and pipeline inventories fell by 7.5% month on month, to 2.02 million mt, due to higher consumption in December.

Rabobank expected India to import more palm oil in January as it restocks. Reduction of Indian import duties on Southeast Asian origins will also make palm oil more attractive compared with other oils, the report added.