KUALA LUMPUR, Oct 16 (Reuters) - Following are comments by key analysts at a palm oil industry conference in Kuala Lumpur:
JAMES FRY, CHAIRMAN, LMC INTERNATIONAL
EXPORT TAXES AND EDIBLE OIL PRICES
"After over a year of hesitating, Malaysia has finally reacted with its own export tax reform. This, together with the emergence of price-sensitive biofuel demand, should stop stocks rising from December, pulling up the premium for palm oil over Brent crude."
"At that time, as South American soybean crop approach, the soy-palm oil premium should shrink, but more important than all these influences is knowing when Brent crude finally falls back to more sustainable levels."
PALM OIL OUTPUT GROWTH PROSPECTS
"2012 output is now benefiting from the good rains in most regions in 2011 and early this year, but there is still a legacy of dry conditions in a couple of Indonesian regions."
"Since oil palms take three years to start producing and eight years to reach peak output, we can expect a rising wave of Indonesian palm oil output."
DORAB MISTRY, HEAD OF TRADING, GODREJ
PRICE FORECAST
"My short term forecast for crude palm oil prices is a level of 2,200 ringgit on the Bursa Malaysia Derivatives third month sometime in the next four to six weeks."
"Prices must enable energy demand to kick in and for vast tonnages to be contracted and shipped out. In the New Year we could look at higher prices."
CHANCE OF IMPORT DUTY IN INDIA
"I have also been asked about the chances of India imposing an import duty on crude palm oil and raising the import duty on refined palm oil and RBD Olein. I believe this will happen but not immediately. Indian domestic prices for soybeans have fallen and farmers are not happy."
"However, the Indian government will wait until local inflation numbers turn lower. This will happen soon because the rupee has got stronger and commodity prices have fallen. Once inflation numbers are lower, the government will be in strong position to give some small protection to oilseed farmers."
ANTI-DUMPING DUTY ON BIODIESEL EXPORTS
"The current anti-dumping inquiry launched by the EU in the case of biodiesel exporters from Indonesia and from Argentina will take about a year to complete."
"At the end, if the EU finds a case for levying an anti- dumping duty, it can be levied with retrospective effect. Therefore, it will remain a cloud overhanging the use of palm products in biodiesel for export."
CRUDE PALM OIL OUTPUT
"Malaysian production will peak in October, it is generally expected that Indonesia will enjoy an extended double peak, that is October and November."
"My expectation is that Malaysia will produce 18 to 18.2 million tonnes of crude palm oil in 2012. I confirm Indonesian crude palm oil production looks like it is exceeding 27.5 million tonnes this year."
ENERGY DEMAND KICKING IN
"At that price level, $749 CIF Rotterdam or Bursa Malaysia Derivatives at 2,200 Ringgits on the 3rd position, palm will be so competitive that energy demand will come back strongly.
"Palm oil will be competitive for blending into fuel for electricity generation. Palm biodiesel will also be super competitive and will go for discretionary blending without requiring a mandate or any subsidy. This is the way stocks can be reduced within three months."
CURRENT FUNDAMENTALS AND EXPORT TAXES
"Given the current fundamentals, Bursa Malaysia futures on the 3rd position should be at 2,200 ringgit. CPO CIF Rotterdam should be US$ 749."
"Malaysia should immediately remove all export taxes and export quotas. Malaysian refiners will be very competitive and will be able to work at full capacity. With zero export duty, palm exports will expand. At this level, the Indonesian export tax also becomes nil."
"Indonesian growers and millers will actually be better off than at present. Malaysia and Indonesia will enjoy a level playing field. With better infrastructure and more efficient ports, there is no doubt Malaysia will win a greater share of the export business. It is a win-win situation for all."
PALM OIL STOCKS
"It now appears fairly certain that Malaysian palm oil stocks will reach or exceed 3 million tonnes on January 1 2013. If prices are held artificially high, it will be counter-productive and stocks on 1st January could be much higher and could remain at 3 million tonnes until March 1 2013."
"The recent difficulty in boosting exports must serve as a warning. Malaysia and Indonesia began a major export push from August onwards.
"The result is high stocks and full pipelines in all destination markets. Even India, which was the best performing market until last month, is now suffering acutely from high priced heavy inventory and a lack of storage. "
THOMAS MIELKE, EDITOR, OILWORLD
PRODUCTION OF OILSEEDS
"Production of the ten oils and fats will not increase for the first time in 20 years. For the new season, we are going see a slight decline in the total crushings of oilseed."
"World production of seed oils to decline in 12 months. Palm oil has to fill part of this demand. Palm oil is in the situation to do this."
"For 2012, Indonesian production is expected to hit 26 million tonnes. Malaysian production is seen at 18.5 million tonnes for the same year.
"Indonesia's production will increase by 2.0 million tonnes, while Malaysia production will be lower by 0.4 million tonnes from a year ago. Total production in this calendar year is 52 million tonnes worldwide."
SHIFT IN DEMAND TO PALM OIL
"World production of all other oilseeds except soybean is declining this season by 5 million tonnes in contrast to a 10 million tonnes increase in last season. It will force a decline in crushing -- by a combined 3.5 million tonnes."
"Palm oil will fill some of this supply gap. I am of the opinion that palm oil prices are undervalued and present a good buying opportunity."
PALM OIL PRICES
"I see palm oil undervalued for several reasons. Palm oil stocks are at a record high in Indonesia and Malaysia, and have are totally discounted in prices. There are indications that palm oil has started to recover in the second week of October."
"What is most striking is the RBD palm olein's discount to soyoil $250 per tonne. This is unsustainable. Palm oil prices in Rotterdam CIF have for a time fallen below Brent crude oil, about $10-15 per tonne. I believe consumers will take advantage of the current, attractive prices. Exporters are ready sellers owing to the currently large stocks."
