Palm-oil prices are set for a “pronounced recovery” as global demand for vegetable oils outpaces consumption, Oil World said.
Futures may rally to 3,300 ringgit ($1,080) a metric ton by March or April in Kuala Lumpur trading, the Hamburg-based researcher said in an e-mailed report. The most-active contract last touched that price on May 11. The oil for January delivery traded at 2,541 ringgit a ton today on the Malaysia Derivatives Exchange. Futures are down 20 percent this year on higher stockpiles in Indonesia and Malaysia, the two largest producers.
The 2012-13 marketing year begun Sept. 1 may be the first in 20 years in which total global seed-oil output will fail to increase, Oil World said. Global consumption of eight major vegetable oils may total 153.86 million tons, outpacing production of 153.05 million tons, the researcher said.
“We expect a pronounced recovery in palm-oil prices due to strong demand and spill-over strength from other vegetable oils,” Oil World said. Declining supplies of soybeans, rapeseed and sunflower seed will “significantly raise world demand for palm oil, which has to fill the gap,” it said.
World palm-oil inventories reached a record 9.2 million tons at the end of September, Oil World said. The researcher expects global production to total 52.28 million tons this year, up from 50.42 tons in the past season.
Global exports of palm oil may rise to 42.6 million tons this year, the highest in at least five years, according to the report. Combined shipments of soybean oil, rapeseed oil and sunflower-seed oil may drop to 19.14 million tons, 5.8 percent less than the previous season.
World production of eight oilseed meals may total 273.09 million tons in the 2012-13 season, up from 270.03 million tons last year, Oil World said. Soybean-meal production may rise 2.9 percent to 183.73 million tons as output rebounds in South America starting in April. Output of seven other meals may decline 2.4 percent on reduced crushing of sunflower seed, cotton seed, rapeseed and ground nuts, Oil World said.
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