HAMBURG, Oct 23 (Reuters) - Palm oil prices are likely to rise sharply in coming months on brisk buying interest as global importers seek cheaper alternatives to more expensive products including soyoil, Hamburg-based oilseeds analysts Oil World said on Tuesday.
“We expect a pronounced recovery in palm oil prices due to strong demand and spillover strength from other vegetable oils,” Oil World said.
Palm oil prices have been generally weak in the past two months, partly on fears about large stocks in Asian producing countries, and is currently about $250 a tonne cheaper than Argentine soyoil, Oil World said.
“Prices of crude and processed palm oils have already recovered by $30-$40 (a tonne) during the past 2-3 weeks,” it said. “Additional advances are likely to occur in the next 2-3 months, but most of the price appreciation will probably occur in the first 3-4 months of 2013.”
“We expect an increase in crude palm oil futures to a high of about 3,300 ringgit ($982 a tonne) on the Bursa Malaysia Derivatives up to March or April 2013.”
The benchmark January palm oil contract FCPOc3 on the Bursa Malaysia exchange was trading around 2,541 ringgit ($833) per tonne on Tuesday.
“In Rotterdam, crude palm oil prices may advance to a high of $1,150 (a tonne), approximately $300 above the current level,” Oil World added.
Global vegetable oil consumption will still rise in coming months, it forecast. The sluggish economic environment and reduced demand for biofuels will slow down the rate of increase but not cause a fall, it said.
Looming declines in export supplies of soyoil, sunflower oil and rapeseed oil will raise global demand for palm, it said.
“The current very attractive palm oil prices give an incentive to switch already now,” it added.
