Palm oil may gain on Indian, EU demand

Palm oil may gain on Indian, EU demand
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First Published: Fri, Mar 30 2007. 12 33 AM IST
Updated: Fri, Mar 30 2007. 12 33 AM IST
New Delhi: Palm oil futures in Malaysia may increase about 7.6% in the next quarter on rising demand for the world’s most-traded vegetable oil from India and increased use of alternative fuels.
The commodity may climb as high as 2,200 ringgit (Rs26,400) a tonne in two to three months on the Malaysia Derivatives Exchange, said Dinesh Kumar, an analyst at TransGraph Consulting.
The most active contract closed on Wednesday at 2,048 ringgit. Palm oil is used for cooking foods and increasingly to help stretch fossil fuels, such as diesel.
India, the world’s second-biggest vegetable oil buyer, may need to import more palm oil as a trade body forecast that the nation would produce 5.4% less oilseeds in the year ending October. Demand for biofuels has helped drive a 42% gain in prices in the last 12 months.
“The Indian factor will help palm oil in Malaysia and Indonesia,” Kumar, who has been predicting prices for the last three years, said in a phone interview from Hyderabad. “Good demand for bio-diesel will also help.”
Palm oil for June delivery gained four ringgit, or 0.02%, to 2,052 ringgit on the exchange in Kuala Lumpur at 10am India time.
India’s edible oil imports may rise 27% to as much as 1.3 million tonnes (mt) in the three months ending April, Kumar said. Edible oil consumption in India may rise to 11.6mt in the year ending 31 October from 11.35mt a year earlier, he said.
India’s production of oilseeds such as soybean, mustard, peanuts and sunflower may be 22.67mt, 5.4% less than 23.97mt a year earlier, the Central Organization for Oil Industry and Trade had said on 17 March.
The 27-nation European Union (EU) wants biofuels to make up an average 5.75% of transportation fuel by 2010 in an effort to cut dependence on fossil fuels and curb greenhouse-gas emissions.
Biodiesel constitutes about 80% of the EU’s biofuels production, 80% of which comes from rapeseed.
That has increased demand for substitute oils, such as palm oil.
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First Published: Fri, Mar 30 2007. 12 33 AM IST
More Topics: Money Matters | Commodities |