Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Palm Oil Prices Near Bottom as Demand Increases, Oil World Says

Don't Miss Out —
Follow us on:

March 19 (Bloomberg) -- Palm oil prices may be near a bottom as demand increases in part as supplies of soybean oil tighten, Oil World said.

Exports from Malaysia, the second-largest producer, rose by 700,000 metric tons in January and February, compared with the same time a year earlier, the Hamburg-based researcher said in an e-mailed report today. The country’s shipments in the first half of March were 5 percent higher than the previous month at 679,000 tons, it said, citing consultant SGS. Exports from top producer Indonesia “exceeded expectations” in December, leaving shipments for 2012 at a record 19.1 million tons.

Palm oil has dropped about 29 percent in the past year on the Malaysia Derivatives Exchange as global stockpiles climbed to a record. The price fell to a two-month low on March 14. Exports of soybean oil, which like palm oil can be used in cooking and biofuel, from the world’s top three shippers slumped 23 percent in February from a year earlier, Oil World said. Shipping delays have slowed supplies from South America, and drought reduced the U.S. soybean crop last year.

“Following the recent weakness, we expect that palm oil prices are close to their lows,” Oil World said. “Prices should find support in coming weeks from the prospective sharp decline in U.S. soybean crushings and soya oil output and stocks.”

Palm oil production in Malaysia was below expectations in February at 1.3 million tons, 19 percent less than in January while still 9 percent more than February 2012, Oil World said.

Export Growth

In Central America and South America, growth in palm oil exports may slow as more supplies are used for domestic biofuel production to fulfill government targets, Oil World said. Shipments from Costa Rica, Guatemala, Honduras, Colombia and Ecuador may rise 3.7 percent in 2013 to 1.25 million tons, compared with a 20 percent jump a year earlier.

Production in those five countries may climb 6.5 percent to 2.64 million tons. While some areas of Colombia and Ecuador are at risk of bud-rot disease, an expansion in acreage may make up for crop losses, Oil World said.

In a separate forecast, Oil World estimated that global peanut exports may total about 2 million tons in the 2012-13 season that began Oct. 1, down from a record 2.2 million a year earlier, because of declining shipments from India.

To contact the reporter on this story: Whitney McFerron in London at wmcferron1@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.