Malaysian palm oil to trade between 3,700-4,500 rgt/T until mid-2025, analyst Mistry says

Patanjali Foods

20/09/2024 08:32

By Rajendra Jadhav
       MUMBAI, Sept 20 (Reuters) - Malaysian palm oil is likely
to trade between 3,700 to 4,500 ringgit ($885 to $1,053) a
metric ton from now until June, as demand is expected to be
buoyant during the Chinese Lunar New Year and the holy month of
Ramadan, industry analyst Dorab Mistry said.
    The benchmark palm oil contract  FCPOc3  for December
delivery on the Bursa Malaysia Derivatives Exchange gained 42
ringgit, or 1.08%, to 3,918 ringgit ($937.74) a metric ton as of
0604 GMT on Friday. 
    "Prices will begin a new bull market in Jan-March 25. The
combination of Chinese New Year and Ramadan in the Jan-March
quarter is bullish," said Mistry, a director of Indian consumer
goods company Godrej International, in a presentation at
industry conference Globoil in Mumbai on Friday. 
    Palm oil consumption tends to rise during the Chinese New
Year festivities. Similarly, consumption of edible oils usually
jumps during the holy month of Ramadan, due in late February and
March next year, as Muslims gather for communal feasts to break
their fast.
    Demand for vegetable oils from the food and energy sectors
is likely to grow by 6 million metric tons in 2024-25 mainly due
to rising consumption in Brazil, India, Indonesia and the United
States, Mistry said.
    He added factors such as crude oil prices, overall climatic
conditions and weather conditions in South America - a leading
producer of soybeans - would weigh on palm oil prices.
    Any move by India to reduce tariffs later this year or next
year would be a key factor in determining palm oil prices,
Mistry said.
    India last week sharply raised the basic import tax on crude
and refined edible oils by 20 percentage points to help protect
farmers reeling from lower oilseed prices.
    Despite the hike in import duties, India's edible oil
consumption is set to grow at a pace of 2% to 3% as cooking oils
remain affordable, Sanjeev Asthana, CEO at Patanjali Foods Ltd
 PAFO.NS , a leading importer, told Reuters on Wednesday.
    Mistry said U.S. soyoil futures would continue to benefit
from brisk biodiesel demand. 
($1 = 4.1780 ringgit)

 (Reporting by Rajendra Jadhav; Editing by Jamie Freed)
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