[KUALA LUMPUR] Global palm oil output is likely to grow at its smallest pace in 13 years with production in top growers Indonesia and Malaysia expected to show a modest rise, leading analyst Thomas Mielke said on Wednesday.
Malaysian palm oil production is likely to reach 19.8 million tonnes in 2015, up from 19.6 million tonnes in 2014, while output in Indonesia is seen at 32.9 million tonnes as compared with 30.8 million tonnes a year ago. "We have bearish demand fundamentals, but bullish supply fundamentals," Mr Mielke, editor of Hamburg-based newsletter Oil World, said at an industry meet in Kuala Lumpur. "We must not look at mineral oil prices as the price indicator for oils and fats." A drop in palm oil production could support benchmark Malaysian futures which slid almost 15 per cent last year, partly dragged by a crude oil rout that made palm an unattractive option for blending into biodiesel.
Mr Mielke in October had forecast that palm oil prices could rise to between 2,300 ringgit and 2,500 ringgit (US$689) per tonne in the first quarter of 2015.
He had said that if crude oil prices fell to US$75 a barrel or lower, palm prices could drop, but will unlikely drop below 2,000 ringgit a tonne.