MARKET DEVELOPMENT
05-12-2001
Malaysia palmoil seen at 1,300 rgt in Q1 '02
KUALA LUMPUR, Dec 3 (Reuters) - Malaysia's crude palm oil futures are setto rebound to four-month highs at 1,300 ringgit or $342 a tonne in thefirst quarter of 2002 on tight soyoil supplies and steady demand frommajor buyers such as India, a leading Indian trader said."CPO index will definitely go to 1,300 ringgit and remain there. It shouldgo there very quickly," Dorab Mistry, director of Godrej InternationalLtd, told Reuters in an interview at the weekend.Malaysia's crude palm oil futures touched 1,613 ringgit ($424.47) a tonne(third-month basis) in May 9, 1999. By midday on Monday, benchmarkthird-month February contract firmed 28 ringgit to 1,125 ($296.1) tonne.Volume was slow at 959 lots.Another bullish factor will be China, which is expected to import 2.4million tonnes of palm oil in 2002 at low tariffs under atariff-rate-quota system following its entry to the World TradeOrganisation (WTO), Mistry said.China's palm oil imports quotas stood at 1.4 million tonnes this year. Itbought 1.02 million tonnes of palm oil from Malaysia in 2000, up from800,135 tonnes in 1999."They will utilise the palm oil quota first. In that case if the Chinesebegin to buy palm oil, we could go to 1,600 ($421.11) ringgit," saidMistry, who was in Malaysia for an industry talk.Mistry said China was likely to use its soyoil import quotas when prices,now at premiums of around $20-$30/tonne to palmoil, softened in April withthe start of South American soybean crop."Between now and the South American season which starts in April, palm oilhas very little competition. But (it) will remain the case if palm oilremains at $20-$30 discount to bean oil FOB," he added.