Soyaoil faces intense competition from palm oil in coming months if forecasts of higher global palm oil output are confirmed, Hamburg-based oilseeds analyst Oil World said on Tuesday. "The prospective recovery of palm oil supplies will severely decimate demand for soyaoil and sun oil in coming months," Oil World said.
Leading analysts including Oil World are forecasting strong rises in 2011 palm oil output in top exporters Indonesia and Malaysia. "Palm oil is competing aggressively for market share," Oil World said, after price falls of about 14 percent from three-year highs reached in early February.
Global demand for both palm and soyaoil was weak recently as China intervened to hold down edible oil prices and sold its state soyabean reserves, while India has been using its large rapeseed crop. "Ultimately the recovery of palm oil supplies may become a limiting factor for soyabean crushings world-wide, thereby also limiting supplies of soyameal somewhat in coming months," Oil World said.
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