Current competitive prices could push up global palm oil demand in coming weeks but this in turn will make palm oil more expensive, Hamburg-based oilseeds analysts Oil World said on Tuesday. "We expect world import demand for palm oil to pick up in the near term," Oil World said.
"Palm oil prices have become more competitive and widened their discounts relative to soyaoil and other vegetable oils, which is likely to trigger a sizeable improvement in demand from the reduced level in the preceding 3-4 months." Malaysian refined, bleached and deodorised (RBD) palm olein vegetable oil for nearby shipment is around $36 a tonne below Argentine soyaoil prices and around $80 below Brazilian soyaoil, Oil World said. In February palm was more expensive than soyaoil. "A recovery of global import demand for palm oil is likely to become supportive for palm oil prices in the near to medium term," it said.
March palm oil output in key exporter Malaysia is estimated by Oil World to have risen about 18 percent from February to 1.29 million tonnes, but still down on 1.39 million tonnes produced in March 2010. It expects Malaysian April/September palm oil ouput to rise by about six percent on the year.