KUALA LUMPUR, March 7 (Reuters) - Following are estimates on palm oil prices and other edible oil markets from leading analysts at the Bursa Malaysia conference that ends on Wednesday.
DORAB MISTRY, ANALYST AND TRADER, GODREJ
PRICE OUTLOOK
Soft U.S. dollar will continue until end of 2012. Brent crude prices to range between $100 to $120.
Expects palm oil prices to peak at $1,250 FOB, or about 4,000 ringgit, by the end of June 2012, thanks to low output cycle, demand from India in peak summer months and stocking by Muslim countries ahead of fasting observance in July.
See a pullback after June with prices remaining in a band of $1,150 to $1,200 FOB. Prices seen declining only after there is evidence that the low cycle is ending, around November 2012.
For the second half, it depends on production. Based on this prognosis, in terms of refined, bleached and deodorised palm olein, April-May-June and July-August-September should trade at a considerable inverse to October-November-Decembt.
Expects degummed soyoil to peak at between $1,250 and $1,300 FOB. Sees Chicago bean oil futures to climb to 60 cents despite the improvement in meal prices on limited acreage for U.S. soybeans and strong soyoil use in South American biofuel sector.
Expects lauric oils to trade higher than at present. Coconut oil will go to a discount to crude palm kernel oil (CPKO) and should trade to a high of $1,550 CIF Rotterdam. CPKO will peak at $1,700 CIF Rotterdam.
GLOBAL SUPPLY/DEMAND
Global demand growth seen at 6 million tonnes in the current Oct-Sept crop year, compared to 5.3 million tonnes rise in edible oil production.
Demand from the food sector up as world economic growth seen rising by three percent although high prices will limit the demand growth to 3 million tonnes. As for biodiesel industry growth, issues in Iran will boost prices and lift the appeal of renewable energy.
SUPPLY FACTORS- PALM OIL
Crude palm oil output will be the single most important factor driving edible oil prices in 2012. Biological high cycle for palm oil production ended in December and there are now signs of tree stress.
The new low cycle will result in flat output for 2012. From March onwards, output each month will be less on a year-on-year comparison. Low cycle will end in November this year.
Keeps same estimate for Malaysian 2012 production which first issued in December. Output seen flat between 18.6-19 million tonnes. (Official Malaysian forecast is 19.3 million tonnes versus 18.9 million tonnes in 2011).
Estimates Indonesian production will be higher by about 1.4 million and will reach 26.5 million tonnes this year on maturing acreage.Official Indonesian forecast is an increase of 14 percent to 25.7 million tonnes.[ID:nL3E8C933G]
Says Malaysia's move to continue tax-free export quota for crude palm oil "can be a clever strategy if they will keep releasing more quota from time to time.
Says more Malaysian crude palm oil exports will keep stocks down and keep futures high although refineries and oleochemical plants will become idle like its biodiesel industry.
Other option is to adopt a carbon copy of the Indonesian export tax regime where tariffs of refined grade are half of that of the crude grade and do away completely with the duty-free export quota for crude palm oil.
Consumers like India, China and Pakistan unlikely to retaliate against Indonesia's tax change to protect their own refining sector as inflation in these countries remain high.
INDIA
Greater food demand to come from India's plan for a massive food security programme that will guarantee minimum amounts of cereals and food to each citizen at subsidised prices.
"When implemented it will create a large further burden of food subsidies and will also increase total Indian consumption of food grains. It is a bold step but one which is not before time."
India's edible consumption seen at a record 13.18 kilogram per capita in the current crop year, up 1.7 percent from a year ago that represents slowing growth due to high prices of vegetable oils.
India likely to buy a record 7.2 million tonnes of palm oil in Nov-Oct oil marketing year, up 8 percent from a year earlier. Soyoil imports seen flat at one million tonnes.
India's total vegetable oil imports to rise 9.3 percent to 9.48 million tonnes from a year ago on lower domestic production of rapeseed and stagnant yields.
DORAB MISTRY, ANALYST AND TRADER, GODREJ
PRICE OUTLOOK
Soft U.S. dollar will continue until end of 2012. Brent crude prices to range between $100 to $120.
Expects palm oil prices to peak at $1,250 FOB, or about 4,000 ringgit, by the end of June 2012, thanks to low output cycle, demand from India in peak summer months and stocking by Muslim countries ahead of fasting observance in July.
See a pullback after June with prices remaining in a band of $1,150 to $1,200 FOB. Prices seen declining only after there is evidence that the low cycle is ending, around November 2012.
For the second half, it depends on production. Based on this prognosis, in terms of refined, bleached and deodorised palm olein, April-May-June and July-August-September should trade at a considerable inverse to October-November-Decembt.
Expects degummed soyoil to peak at between $1,250 and $1,300 FOB. Sees Chicago bean oil futures to climb to 60 cents despite the improvement in meal prices on limited acreage for U.S. soybeans and strong soyoil use in South American biofuel sector.
Expects lauric oils to trade higher than at present. Coconut oil will go to a discount to crude palm kernel oil (CPKO) and should trade to a high of $1,550 CIF Rotterdam. CPKO will peak at $1,700 CIF Rotterdam.
GLOBAL SUPPLY/DEMAND
Global demand growth seen at 6 million tonnes in the current Oct-Sept crop year, compared to 5.3 million tonnes rise in edible oil production.
Demand from the food sector up as world economic growth seen rising by three percent although high prices will limit the demand growth to 3 million tonnes. As for biodiesel industry growth, issues in Iran will boost prices and lift the appeal of renewable energy.
SUPPLY FACTORS- PALM OIL
Crude palm oil output will be the single most important factor driving edible oil prices in 2012. Biological high cycle for palm oil production ended in December and there are now signs of tree stress.
The new low cycle will result in flat output for 2012. From March onwards, output each month will be less on a year-on-year comparison. Low cycle will end in November this year.
Keeps same estimate for Malaysian 2012 production which first issued in December. Output seen flat between 18.6-19 million tonnes. (Official Malaysian forecast is 19.3 million tonnes versus 18.9 million tonnes in 2011).
Estimates Indonesian production will be higher by about 1.4 million and will reach 26.5 million tonnes this year on maturing acreage.Official Indonesian forecast is an increase of 14 percent to 25.7 million tonnes.[ID:nL3E8C933G]
Says Malaysia's move to continue tax-free export quota for crude palm oil "can be a clever strategy if they will keep releasing more quota from time to time.
Says more Malaysian crude palm oil exports will keep stocks down and keep futures high although refineries and oleochemical plants will become idle like its biodiesel industry.
Other option is to adopt a carbon copy of the Indonesian export tax regime where tariffs of refined grade are half of that of the crude grade and do away completely with the duty-free export quota for crude palm oil.
Consumers like India, China and Pakistan unlikely to retaliate against Indonesia's tax change to protect their own refining sector as inflation in these countries remain high.
INDIA
Greater food demand to come from India's plan for a massive food security programme that will guarantee minimum amounts of cereals and food to each citizen at subsidised prices.
"When implemented it will create a large further burden of food subsidies and will also increase total Indian consumption of food grains. It is a bold step but one which is not before time."
India's edible consumption seen at a record 13.18 kilogram per capita in the current crop year, up 1.7 percent from a year ago that represents slowing growth due to high prices of vegetable oils.
India likely to buy a record 7.2 million tonnes of palm oil in Nov-Oct oil marketing year, up 8 percent from a year earlier. Soyoil imports seen flat at one million tonnes.
India's total vegetable oil imports to rise 9.3 percent to 9.48 million tonnes from a year ago on lower domestic production of rapeseed and stagnant yields.
