European coconut oil seen easing

European coconut oil prices, which hit a four-year high earlier this month, are expected to ease in coming weeks as shipments from Asia recover, traders said on Monday.
European markets have seen tight supplies from the Philippines - the world's largest exporter of coconut oil - over the past month due to a declining crop, which boosted prices as high as $800 per tonne in early May.
"Slowly but surely, the supply is improving. I expect the prices to drop by some $10 to $20 per tonne in the coming weeks," one trader said.
"We expect new shipments, which would increase the stocks in Rotterdam by some 20,000-25,000 tonnes," he added.
May/June coconut oil fell $10 on Monday to $720 [OILS/E], while April/May was quoted at $755.
Coconut oil stocks in Rotterdam dwindled to 3,370 tonnes last week from some 7,650 a week earlier. Stocks fell to 16,000 tonnes at end-March from 109,000 a year earlier.
Last month, Hamburg-based newsletter Oil World said global April/September 2004 coconut oil production was likely to fall to a five-year low of 1.55 million tonnes, reducing exports and world stocks.
But earlier this month the US Department of Agriculture projected that Philippines' production of copra - the dried meat from which oil is extracted - would rise in 2004/05. It said coconut trees had started to recover from the stress caused by two consecutive years of heavy nut-bearing.
But traders in Europe said it would most likely take another two months until supplies returned to normal.
"We have to wait for the typhoon season in the Philippines to be over. Stocks will not rise so quickly," one trader said.
"Demand for coconut has been falling because of the higher prices and people substitute it with cheaper palm oil, which has lost some $50 (per tonne) over the past weeks," the trader said.
June shipment crude palm oil was quoted at $530 per tonne cif Europe on Monday.
Other traders attributed tight coconut oil supply in Europe over the past month to higher prices offered in the United States and China, which made them more attractive for the Philippines coconut oil producers.