DJ Analyst Fry: Southeast Asia Palm Oil Output Starting To Slow, Supporting Prices 17.11.2011
KUALA LUMPUR (Dow Jones)--Palm oil output in top producing countries Indonesia and Malaysia is starting to slow as trees enter a seasonally weak production period, pushing palm oil inventories lower and supporting prices, leading vegetable oil analyst James Fry said Thursday.
However, with crude oil prices above $100 a barrel--a level widely seen as unsustainable amid macroeconomic concerns--and as supply of petroleum from Libya resumes, palm oil upside is limited said Fry, who is chairman at agribusiness consultancy firm LMC International Ltd.
Fry told an industry conference that expects rising supply of crude oil to drag ICE Brent crude-oil futures down toward $79 a barrel by June, which may drag crude palm oil, used for food production and to produce biodiesel, toward $850/ton.
Benchmark February CPO on Bursa Malaysia Derivatives was last trading 0.6% higher at MYR3,259, equivalent to $1,034.70, a ton.
ICE Brent January crude oil was down 0.1% at $111.73 a barrel