Malaysian palm oil futures are likely to rise to 4,000 ringgit ($1,303) per tonne by end-June as demand increases ahead of the Muslim fasting month of Ramadan while Southeast Asian supplies diminish, top industry analyst Dorab Mistry said on Tuesday.
Mistry's forecast, which is unchanged from earlier this month, represents a 15.3 percent jump from current palm oil prices, trading at 3,467 ringgit per tonne at 0430 GMT.
Mistry, head of edible oils trading with Godrej Industries, said many countries in Asia and the Middle East were stocking up on palm oil in June ahead of the Muslim fasting month, which is due to start around July 20. These summer months, however, are when production usually declines in top palm oil producers Indonesia and Malaysia, where plantations are also seeing weaker yields after last year's strong output.
"Demand for palm oil will be greatest just when production will not have had time to recover. We are likely to see very tight stocks and a run up in prices so as to ration demand," Mistry said in a speech at an industry conference in Beijing. "Reports of March production are also not encouraging. As I have earlier pointed out, CPO production in the first half of 2012 will be lower than it was in the first half of 2011," he added, referring to crude palm oil.
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