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KUALA LUMPUR, March 24 -- The world production of palm oil is likely to rebound by 3.2 million tonnes in the October 2020-September 2021 season, while Malaysian production is expected to decline 500,000 tonnes, said Oil World executive director Thomas Mielke.
The Indonesian output is estimated to go up 3.3 million tonnes, the commodity expert said on the second day of the Virtual Palm and Lauric Oils Price Outlook Conference (POC 2021) today.
Hence, he said global palm oil supplies are likely to remain tight, limiting the price declines for the rest of 2021.
“If the global production of oilseeds rebounds, palm oil price for this year is likely to weaken from the current level, but stays elevated throughout 2021.
“Bullish factors have already been discounted and there is a high possibility for prices to come under pressure in April-June, 2021,” he added.
Meanwhile, LMC International chairman James Fry said benchmark palm oil prices in Malaysia may drop to RM3,300 per tonne by the fourth quarter of this year as a recovery in output gradually boosts stockpiles.
“The perfect storm of low production worldwide created a big problem for the supply of oils.
“The tight supplies were compounded by the failure of governments to ease biofuel mandates temporarily to take pressure off demand (unlike in 2016-2017) and end the explosive bull market,” he said.