KUALA LUMPUR: Palm oil price is expected to increase by year-end due to low production of substitutes such as vegetable and soybean oils, the Malaysian Palm Oil Council (MPOC) said.

The US Department of Agriculture has been reported to have cut soybean production by about 5% and this could lead to low supply globally.       

“This is an advantage to Malaysian palm oil.

“With low soybean oil supply, it can help boost palm oil prices as more global market players will seek for the commodity (palm oil), of which Malaysia is the second biggest producer after Indonesia,” council chairman Datuk Lee Yeow Chortold Bernama on the sidelines of the Palm Industry Leadership Forum 2013.

For the past eight months, the council has been monitoring the palm oil inventory, which saw the commodity’s stock level steadily dwindling to 1.6 million tonnes as at July, Lee said. He expects the inventory to further fall by year-end.

Meanwhile, Cargo Surveyor, Intertek Testing Services, has estimated higher palm oil exports to 880,979 tonnes for the Aug 1 to 20 period versus 798,482 tonnes in the same period in July. The improved export figures were mainly attributed to China, the world’s largest consumer of edible oil that began restocking of palm oil ahead of its September Mid-Autumn Festival. — Bernama

Source : The Star