(Updates throughout)
By Naveen Thukral
SIEM REAP, Cambodia, Sept 3 (Reuters) - Malaysian crude palm
oil futures are rise about 18 percent to 2,900 ringgit ($844.5)
per tonne by December on strong demand and lower output yields,
top industry analyst Thomas Mielke said on Wednesday.
The price of the reddish-brown vegetable oil slid about 17
percent this year and halved from an all-time high of 4,486
ringgit hit in March, due to a knock-out combination of high
stocks and news of defaults from key buyers India and China.
"In December the price should be around 2,700 to 2,900
ringgit for the third month contract. We expect increases in
prices from here for several reasons," Thomas Mielke told
reporters on the sidelines of a regional grains conference in
Cambodia.
"Global demand for palm oil is going to pick up due to the
very wide price discounts of palm oil relative to soyoil and
other vegetable oils. Palm oils discounts are unusually high at
the moment whatever locations you take," he said.
Mielke, head of German oilseeds research group Oil World,
said the differential between the two products was as high as
$500 in the Rotterdam market at the end of August, with crude
palm oil being quoted at $835 per tonne and crude soyoil at
$1,338 per tonne.
Malaysian crude palm oil futures edged down 0.5 percent to
2,451 ringgit per tonne on Wednesday as crude oil fell closer to
the crucial $100 marker, weighing heavily on vegetable oil
markets from China to the United States, traders said.
YIELDS SLOWING, EXPORTS PICKING UP?
Palm oil supplies have been on the rise in recent months due
to the high output cycle in top Asian producers Malaysia and
Indonesia.
A Reuters poll on Tuesday showed Malaysia's August palm oil
stocks are expected to edge up 1.2 percent from a month ago as
production could hit its highest level so far this year and
outstrip export growth. [ID:nKLR50134]
But Mielke said the upswing in production was likely to ease
off by the end of the year.
"In our judgement, the biological yield cycle of the trees
is likely to slow down following approximately 15 months of high
production," he said.
Last week, another analyst Dorab Mistry said Malaysian crude
palm oil output forecasts of 17.4 million tonnes could be
comfortably exceeded while Indonesia's output will rise beyond
19 million tonnes. The Indonesian Palm Oil Producers Association
is forecasting 18.6 million tonnes this year. [ID:nKLR76265]
Mielke noted export trend was slowly gathering pace for the
vegetable oil, which is used in products ranging from sweets and
soaps to biofuel.
"Palm oil has become interesting again as feedstock for
energy. Palm oil exports from Malaysia and Indonesia since July
are increasing," he said.
Shipments of Malaysian palm products rose by up to 8 percent
in August to nearly 1.5 million tonnes, data from cargo
surveyors show. In July exports had jumped as much as 27 percent to about 1.1 million tonnes, snapping two straight months of
declines.
($1=3.434 Ringgit)
(Writing by Niluksi Koswanage; editing by Christopher
Johnson)
(([email protected]; +603 2333 8035; Reuters
Messaging: [email protected]))
Keywords: MALAYSIA PALM/MIELKE