More buying by China, India may take palm oil to 9-year high

Asia’s vegetable oil guzzlers, China and India, are likely to step up purchases in the coming months and boost palm oil prices, which has already hit near nine-year highs on a squeeze in supplies.

The onset of summer and firm yuan currency against the dollar will result in larger quantities of palm oil flowing into China, the world’s largest edible oil buyer, traders said.
Supplies of palm oil, widely used in products ranging from food and costmetics to fuel, are unlikely to improve dramatically despite good rains in the growing regions.

“There is definitely a change in the production pattern this year where yields have not been as high as anticipated,” said Martin Bek-Nielsen, executive director at United Plantations.

“The output in Indonesia is also increasing but not as substantially as one would have expected because of the earlier drought,” said an official at one plantation company in Jakarta.

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