Veteran trader Dorab Mistry said that the stagnation of palm oil production and declining inventories will support palm oil in the short term relative to other edible oils**.
In an interview, Mistry, director of Godrej International***, said that in 2024, Indonesia's production could fall by at least 1 million tons, while Malaysia's production is likely to remain flat. He said the trend is likely to continue for at least five years as the industry faces aging trees, unstable weather and little improvement in agricultural practices.
On the sidelines of the Palm Oil and Lauric Oils** outlook meeting in Kuala Lumpur, he said that "I think you have to be reasonably bullish on all oil, especially palm oil," due to production constraints. He said that while the production of other oilseeds will climb this year, "unfortunately, the yield of palm trees is lagging behind".
These ** issues are disrupting the huge discount of palm oil on alternative oils. In some markets, tropical oils** trade more than soybean and sunflower oils, an unusual phenomenon that will continue until around October, when palm production will peak seasonally, Mistry said. Mistry has been trading vegetable oils for decades.
Benchmark palm oil is about 6% this year.
Unfavorable weather is also a major factor in the crop market. Favourable conditions are generally favourable for recent harvests and have helped to bring grains and oilseeds** to their lowest levels in more than three years. But this may not last.
"Last year, we dodged bullets in several places around the world," Mistry said. ”。We must remain vigilant. ”
Hotspot Engine Program