Malaysian palm oil is expected to trade between 3,900-4,500 ringgit (€759.62 – €876.50) per metric tonne from now until June, as supplies are likely to tighten in the second quarter, industry analyst Dorab Mistry said.
"Palm production in Southeast Asia is not coming up to expectation," Mistry, the director of Indian consumer goods company Godrej International, said at a price outlook conference in Kuala Lumpur.
On Wednesday, the benchmark was trading at 4,046 ringgit (€788.06) per tonne.
In November, Mistry had forecast palm oil to trade between 3,700 (€720.66) and 4,500 (€876.48) ringgit per tonne until June.
On Wednesday, he reiterated that 2024 palm oil output is likely to fall by 1 million metric tonnes in the world's biggest producer Indonesia, and remain stagnant in second-biggest producer Malaysia.
Vegetable Oil Demand
Global vegetable oil demand from the food and energy sectors is expected to rise by 6 million metric tonnes in 2023/24, but supplies are projected to increase by only 3.1 million metric tonnes, he said.
The El Niño hot and dry weather phenomenon in 2023 turned out to be a lot milder than expected and hardly made an impact in the palm-producing areas, he said.
In the past, the El Niño has squeezed palm oil yields in the main producers, Indonesia and Malaysia.
Sunflower oil supplies from top producers Russia and Ukraine are not affected by the ongoing war between the two countries and are shipped at lower prices because of currency depreciation against the U.S. dollar, he added.
Soyoil futures on the Chicago Board of Trade (CBOT) are likely to recover in coming months on rising demand in the United States for biodiesel, Mistry added.
