3/5/05 - IN what could be termed as an unusual unanimity of views,almost all the speakers at the Palm Oil Price Outlook 2005 conference heresaid they expected crude palm oil prices to rule between Malaysia ringgit(MYR) 1,300 and 1,500 a tonne, with the average lying somewherein-between.

Speaking on "India and the Price Outlook for World Vegoils in 2005", MrDorab Mistry, the London-based Director of Godrej International Ltd, saidhe expected crude palm oil market to be in the MYR 1,300-1,400 rangeduring March-May, but more towards the upper-end of the price band.

From June, the market may move towards the lower end because of SouthAmerican bean oil supplies; and in the third quarter, factors such asweather, palm oil production cycle and northern hemisphere crop progresswould come into play, he added.

Given the fine balance between incremental demand and supply for 2005-06,there can be no bearishness, according to Mr Mistry.

"If there is any weather hiccup, prices would flare up" he asserted.

The speaker saw oilseed import in to India as a distinct possibility andestimated potential imports of about five lakh tonnes comprising high oilcontent seeds such as sunflowerseed and rapeseed.

Referring the active role of American multinationals in the Indian soyamarket, he rebuked Malaysia of neglecting investments in India.

If there is no problem on the production front, prices will be steady tofriendly and not runaway; otherwise, there would be a rally, according toMr Thomas Mielke, Editor of the well-known industry magazine Oil Worldpublished from Hamburg. He believes palm oil production could slowdownduring April-September period this year, incidentally the peak outputmonths for the commodity.

Mr Mielke saw Malaysian crude palm oil futures prices averaging MYR 1450 atonne over the next 2-4 weeks and later to move into the MYR 1450-1550range once palm oil production slowdown is confirmed.

Mr Mielke estimated 2004-05 world soyabean crop at 217.5 million tonnes(mt) versus 184.9 mt last year.

Although current estimate points to a crop size of 57 mt in Brazil (downfrom the initial target of 65 mt), continued dry weather can push theBrazilian soyabean crop down to 54 mt and Argentine crop to 36.5 mt (39ml.t.), he pointed out.

Striking a slightly less optimistic note, Dr James Fry of the London-basedconsultancy, LMC International, said a small surplus of supplies overdemand this year and high Indian tariffs on palm oil may in the short rundepress crude palm oil prices towards MYR 1,200 a tonne; but a thirdquarter upward movement in the soya market will lift palm oil values closeto MYR 1400, before the level falls away below MYR 1,200 in the lastmonths of 2005.

Commenting on India's role in impacting prices, Dr Fry said with its largeoil imports and ability to switch from palm to soft oils, India plays acrucial role in determining the structure of vegoil prices. Its importtariff advantage for soyaoil is almost exactly reflected in the EU soyaoil premium over crude palm oil, he pointed out adding that recent hike inIndian customs duty will tend to penalise palm oil further.