Palm oil prices to plunge due to oversupply and lower demand
Source : afp.google.com
Palm oil prices could fall by 46% next year due to oversupply and waning demand for biofuels, despite measures to cut production in Southeast Asia, a brokerage group has said. CLSA Asia-Pacific Markets has slashed its forecast for palm oil prices by 46% in 2009 and 32 percent in 2010, from current levels of about 1'455 ringgit (405 dollars) per tonne. In a report released last week, the brokerage said it expects the commodity to trade at 1'000 ringgit (278 dollars) per tonne next year and 1'250 ringgit in 2010. Prices of palm oil have plummeted by 68 percent since a March high of 4'486 ringgit per tonne due to the financial crisis and the falling price of crude oil - which reduces demand for palm oil to supply the biodiesel industry. Malaysia's palm oil inventory in October hit a record 2.1 million tonnes - a 14% increase from the previous year - due to a production surge and a slowdown in exports to China and the Netherlands.
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17 November 2008 |
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