Oil World believes palm oil prices will remain high

HAMBURG: Global palm oil prices are likely to remain high in coming months despite recent weakness, Hamburg-based oilseeds analysts Oil World forecast yesterday.

"Palm oil prices will indeed be supported in the next four to six months, considering that soyaoil supplies are still tight in South America, sun oil supples are becoming increasingly scarce and the production prospects for palm oil are at least uncertain," it said.

Unusually large palm tree replantings in Malaysia will reduce the area of mature productive trees while the El Nino weather pattern could damage Asian palm production, it said.

Global soyaoil supplies are still tight following poor South American soyabean crops in early 2009 while a large rise in sunflower oil crushings following a poor crop is likely to cut stocks.

Malaysian crude palm oil futures have dropped after hitting a seven-month high on January 5, dragged down by bigger-than-expected stock levels in December, weaker exports in the first 10 days of January and fears of reduced China buying. But the long-term outlook was still for firm palm prices and this was increasingly being realised, it said. - Reuters

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Traderone: Well, this goes in line with the chart which is still bullish biased in the longer term.