SINGAPORE, March 22 (Reuters) - Palm
oil futures could rise to 2,400 to 2,700 ringgit ($770
to $865) per tonne by the end of May, as weaker production speeds a fall in
stockpiles, leading analyst Dorab Mistry said on Friday.
The forecast is an upward revision
of his earlier prediction for prices to fall below 2,200 ringgit between April
and the end of June, as crude palm oil yields have fallen more than expected.
"I am projecting today that
Malaysian stocks will dip below 2 million tonnes in June 2013. Indonesian
stocks will also be drawn down below 4 million tonnes," Mistry said in a
speech to be delivered at an industry seminar in Beijing.
Palm stocks in Malaysia, the second
largest producer of the commodity, stood at 2.44 million tonnes at the end of
February. While top producer Indonesia does not publish official stocks data,
Mistry pegged its stocks at close to 5 million tonnes in early March.
A weaker ringgit ahead of the
Malaysian elections, which have to be called by the end of April, could also
offer greater scope for the ringgit-denominated futures to rise as the
commodity becomes cheaper for overseas buyers, added Mistry, who is the head of
vegetable oil trading with Indian conglomerate Godrej Industries
But prices will still come under
pressure after June, Mistry said, and especially once the low production cycle
ends in the August-September period.
With energy prices on a decline, futures may fall to 2,000 ringgit, or even lower, after August.
"I do not expect them to break 1,800
ringgit unless Brent crude oil trades below $80 per barrel," he said,
sticking to a prediction he made in Kuala Lumpur this month.
