Palm prices remained firm until February, but could decline from March, analyst Mistry says

PANAJI, India, September 25 (Reuters) – Malaysian crude palm oil prices, which hovered near record highs last month, will remain firm through February, but start to ease from March onwards, Thanks to the rise in production in the two main producing countries, main industry said analyst Dorab Mistry on Saturday.

Benchmark raw palm prices have jumped nearly a quarter this year, recovering for the third year in a row as a pandemic-induced labor shortage slashed production in Malaysia, the second-largest producer global.

The contract hit a record 4,560 ringgits per tonne in mid-August, but high prices dampened demand in price-sensitive markets such as India, the world’s largest buyer of edible oils.

Mistry, the director of Indian consumer goods company Godrej International, has revealed bullish outlook for the next five months, amid Indonesia’s high export tax and a spike in supply tension expected in the early stages. 2022.

He set palm oil prices in the 4,000 ringgit to 4,400 ringgit range from October to February before falling in March.

“The high prices (will end) from April 2022,” Mistry said at the Globoil India conference in the resort state of Goa.

He predicted that prices would drop from 3,800 ringgit to 3,200 ringgit from April to September, supported by the Indonesian mandate on biodiesel and the export tax.

“Palm oil production in Malaysia will not resume until after Ramadan in 2022,” Mistry said. The Muslim holy month is expected to begin around April 2.

Mistry lowered his 2021 estimate for Malaysia’s production to 18.2 million tonnes. Next year’s output is expected to reach 19.2 million tonnes if the government alleviates the severe labor shortage, he said.

The production of Indonesia, the world’s largest producer, will increase in 2022 by at least 1 million tonnes from 2021, he added.

Global palm oil supply is expected to increase by 2.5 million tonnes in the 2021/22 season, compared to an increase of 1 million in the previous season as demand for food and fuel increases, said Mistry.

Reporting by Mei Mei Chu and Rajendra Jadhav; Editing by Clarence Fernandez

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