MALAYSIA’S
crude palm oil (CPO) prices, which are currently stable at RM2,700 a
tonne, are expected to remain firm until the first quarter of 2011, due
to the delay in potential yields in 2010 as a result of the the El Nino
and La Nina effect.
Malaysian Palm Oil Council chief executive
officer Tan Sri Yusof Basiron said this may eventually lead to
substantially higher CPO output in Malaysia and Indonesia next year.
“CPO price may remain firm into the first quarter of 2011 if the
projected lower soyabean output in South America materialises,” Yusof
told participants of the third annual palm oil trade fair and seminar
2010 in Kuala Lumpur yesterday.
He noted in his working paper
“Glimpse of 2011 – Pointers for 2011 on Global Oils and Fats Trade” that
the average price of CPO for the rest of the year should be at about
RM2,600 a tonne, supported by firm oil price.
Palm oil may remain the growth leader among the world’s 17 edible oils
and fats spearheaded by Indonesia and Malaysia as the world’s first and
second largest sources of supply respectively in 2011, he added.
Yusof
said South America’s soyabean production in 2011 will be key to any
potential upsides of CPO price, particularly in the first half of next
year.
“At this point of time, projected lower soyabean
production may further deteriorate as the dry spell remains a teething
factor for the output.”
He added that an increase in the
soyabean oil application for biodiesel production in South America
should further reduce the availability of soyabean oil traded globally.
Source : Business Times
