Palm oil prices likely to touch $565/tonne by next Apr-June

Palm oil futures in Malaysia, the world’s biggest supplier of the commodity, may gain next year because of rising demand for its use in processed food and fuels, according to Thomas Mielke, editor-in-chief of Oil World.

‘‘The market for palm oil will explode’’ should the pace of growth in biodiesel demand be maintained, Mielke said at a conference in Beijing. Demand for vegetable oil, including palm oil, may outstrip supply by as much as 5 million tonne, he said.
The EU wants every tank of fuel to consist of 5.75% biofuels by 2010. High crude prices and pollution concern are prompting governments to seek alternative fuels such as ethanol made from corn and sugar, and biodiesel from canola and palm oil.

Increased imports of vegetable oils by the EU, China and India have more than offset any rising production from Indonesia, Malaysia and Argentina, the three main exporters. Any production cuts may drive prices to 1,800 ringgit in the short-term, Mielke said.

Financial Express