Palm oil futures could drop this year to their lowest level since February 2009 despite poor weather in the top growing countries and trade may be volatile because of uncertainty in the global economy, senior industry officials said on Monday. Unfavourable weather in top growers Indonesia and Malaysia could cause some tightness in supply but any El Nino phenomenon this year will be weak and therefore not as damaging to output as feared, the officials told a conference in Kuala Lumpur. Malaysian palm oil prices, which set the tone for global prices, are expected to trade between RM1,820 (US$504) and RM2,750 per tonne in 2015, said Ramli Abdullah, head of the economic unit of the Malaysian Palm Oil Board, revising the lower end of the range from the 1,800 ringgit given earlier in his presentation. In October he had forecast a much narrower range of RM2,300 to RM2,500 for this year. The April contract was trading at around RM2,313 on Monday. Ling Ah Hong, director at Malaysian-based plantation research company Ganling Sdn Bhd, also doubted a weak El Nino would cause much disruption to palm oil supplies in Southeast Asia. Ling said the absence of severe weather threats meant benchmark palm prices would be driven by global demand factors, oilseed supplies and crude oil prices.
Posted on: Tue, 20 Jan 2015 09:23:49 +0000