Update Palm prices may hit 2,300 rgt by end-2015 - Mielke

by **Cals** Fri 17 Apr 2015, 00:10

Update
Palm prices may hit 2,300 rgt by end-2015 - Mielke

By Reuters / Reuters | April 16, 2015 : 3:21 PM MYT
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KUALA LUMPUR (Apr 16): Palm oil prices will likely trade at 2,200 ringgit by end-June, leading analyst Thomas Mielke said on Thursday, and may rise to 2,300 ringgit by end-2015, partly supported by weaker output of rival oils.
However, prices would continue to hold a fairly narrow range and were unlikely to break below 2,000 ringgit, Mielke, editor of Hamburg-based newsletter Oil World, said at an industry seminar in Malaysia.
"That is the major message I wanted to give: don't panic," he said.
The benchmark July contract on the Bursa Malaysia Derivatives rose 0.4 percent to settle at 2,160 ringgit ($591) a tonne by the midday break on Thursday.
Mielke reiterated that palm oil output will record its smallest annual growth in 13 years in 2014/15, with an expected 1.3 million tonne increase - smaller than a 1.5 million tonne rise predicted in March.
Malaysian palm oil production in 2015 will likely be flat at 19.7 million tonnes, he said on Thursday, trimming an earlier estimate for output to rise to 19.8 million tonnes.
Output in top grower Indonesia meanwhile is expected to rise to 33.0 million tonnes this year, slightly above a 32.9 million tonne forecast given in March.
In 2014, No.2 planter Malaysia churned out 19.67 million tonnes of crude palm oil.
Mielke added that weak crude oil and other vegetable oil prices have prompted farmers of annual crops to cut back production, which may lend support to palm oil prices.
"The weakness in oil prices have reduced the profitability of rapeseed and sunflower seed production... and farmers are reacting quickly - production is cut back," he said.
"We don't see an increase in an combined production of rapeseed and sunflower oil in the near term - this will help palm oil."
Exports of palm, however, may continue to drop, especially in Malaysia.
"I'm concerned about the lack of growth in the world's palm oil exports in two consecutive years," he said.
"Malaysia is losing market share. And can we really blame weather conditions for the declining yields we are now seeing for the past couple of years? I think we can't."
For palm's energy demand, the amount of biodiesel consumption in Indonesia remains a "swing factor", Mielke said.
He expected Indonesian biodiesel production at 3.0 million tonnes in 2015, of which 2.2 million tonnes would be used domestically and 0.8 million tonnes exported.[/size]