| RSS
Business center
Office
Post trade leads
Post
Rank promotion
Ranking
 
You are at: Home » News » internal »

Asian palm oil prices to remain strong in Q1 2017: Rabobank's Chow

Increase font size  Decrease font size Date:2017-01-20   Views:489
Palm oil prices on the Bursa Malaysia exchange should continue to be supported in the first quarter of 2017, with price levels hovering around MR 3,000/mt or $672.75/mt, Kelvin Chow, food and agribusiness analyst at Rabobank Singapore said on Tuesday.

Price support would emanate from the yearly seasonal production downturn as well as the pick-up in January Malaysian and Indonesian palm exports, he said.

Weather reports from Indonesia and the southern peninsula of Malaysia showed that the region would be quite dry, with lower-than-usual rainfall in January, Chow said.

Palm oil prices would remain supported during Q1 due to the drier-than-usual weather, following the severe El Nino in 2016.

However, any increase in rainfall would reverse this trend, he added.

The increase in palm exports in January is mainly due to cargoes to the Indian market, which had been starved of cash due to the recent demonetization exercise. But, about 50%-60% of the liquidity was returning to the Indian market, reviving palm oil demand.

Meanwhile, Chinese demand for palm oil still poses a big question mark, he said.

The recent escalation in Chinese anti-dumping duties on US dried distiller grains or DDGs -- which are a cheap animal feed component -- to 53.7% from 33.8% along with an increase in countervailing duties to 12% from 10.7% has effectively shut US DDGs out of the Chinese market.

Chinese feed millers are currently using soybean meal, instead of DDGs in their feed formula, Chow said, which would lead to greater demand for soybeans.

When soybeans are crushed to produce soybean meal, soybean oil is also extracted during the process.

Greater soybean crushing to fulfill meal demand within China would lead to greater soybean oil stocks in the country and reduce demand for palm oil there, Chow added. This trend of lower palm oil demand from China had been quite visible during the last two quarters of 2016, he added, since the Chinese government had also been releasing its strategic soybean oil stocks in 2016.
 
 
[ Search ]  [ ]  [ Email ]  [ Print ]  [ Close ]  [ Top ]

 
Total:0comment(s) [View All]  Related comment

 
Recomment
Popular
 
 
Home | About | Service | copyright | agreement | contact | about | SiteMap | Links | GuestBook | Ads service | 京ICP 68975478-1
Tel:+86-10-68645975           Fax:+86-10-68645973
E-mail:yaoshang68@163.com     QQ:1483838028