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Palm oil prices set for new record highs in coming months - analyst James Fry

Palm oil prices set for new record highs in coming months - analyst James Fry

A person holds bottles of cooking oil made from oil palms at a supermarket in Subang Jaya, Malaysia, March 8, 2022. REUTERS/Hasnoor Hussain

KUALA LUMPUR : Palm oil prices could hit a record 8,100 ringgit ($1,938) a tonne in coming months following a plunge in global edible oil stocks and a decline in export surpluses, including the impact of war in Ukraine, analyst James Fry said on Wednesday.

He expected locally delivered crude palm oil prices in Malaysia to range between 6,600-8,100 ringgit a tonne until July, easing to 6,200-7,000 ringgit in the third and fourth quarters when supply builds up and demand reduces.

"The cupboard is bare; therefore there is no alternative to letting high prices do the job of rationing demand to balance the market," Fry, chairman of agribusiness consultancy LMC International, told an industry conference in Kuala Lumpur.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was trading around 6,622 ringgit ($1,583) a tonne on Wednesday.

Key global veg & mineral oil prices in US dollars/tonne https://fingfx.thomsonreuters.com/gfx/ce/movandodnpa/GlobalOilsMar2022.png

Prices have risen 38per cent so far this year.

Fry said as much as 60per cent of Black Sea sunflower oil exports, or 8 million tonnes, would be delayed following Russia's invastion of Ukraine.

"A month ago we expected Black Sea sun oil exports to grow well over 2 million tonnes to 13.5 million in 2021/22. Now the question is how much will be lost due to the invasion," he said.

(Reporting by Mei Mei Chu; Editing by Richard Pullin)

Source: Reuters

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