Palm oil prices to fall

Palm oil prices in the coming year might fall about 9 percent from their average in the last 12 months as global palm output is expected to rise sharply, Hamburg-based oilseeds analysts Oil World said on Tuesday. Palm stocks in Malaysia, the world's No 2 producer, rose to a 16-month-high of 1.92 million tonnes on June 10.
Oil World forecasts European benchmark palm oil prices in Rotterdam will fall by about 9 percent in July 2011/June 2012 from a year earlier to an average $1,000 a tonne. Rotterdam crude palm oil for July delivery closed at $1,120 a tonne on Monday. It added: "For April/September 2011 we estimate world palm oil production will increase sharply by 2.2 million tonnes or 9.4 percent from last year." Output in the previous six months had fallen by 0.1 million tonnes, it stressed. "For October 2011/September 2012 we forecast another sharp increase in world palm oil production by 2.8 million tonnes or 5.7 percent," it said. "This plus higher world palm oil stocks could result in additional downward pressure on palm oil prices." "We expect palm oil to widen its price discount against soyaoil and rape oil in the months ahead."