Palm oil will probably extend its rally next year as the worst El Nino in almost two decades curbs output in the world’s biggest producers and Indonesia uses more for fuel, according to delegates at a conference in Bali. Futures climbed to the highest in more than two weeks.
The most consumed cooking oil found in everything from candy to instant noodles has jumped 26% from a six-year low in August after drought and smog hurt plantations in Southeast Asia. At the same time Indonesia is raising the amount of palm blended with diesel to 20% from 15%. That’s boosted futures as prices of other farm commodities slump.
“El Nino and the Indonesian biodiesel mandate are a powerful cocktail that has the potential to drive prices in 2016,” Dorab Mistry, director of Godrej International, said in an interview.
This El Nino will probably rank among the three strongest since 1950, the World Meteorological Organization says. It’s comparable to record events in 1997-98 and 1982-83, according to the Australian government. Output fell 5.5% in Malaysia and 7.2% in Indonesia in 1998, US Department of Agriculture data show. Production slid 5.1% in Malaysia in 1983. The two countries supply about 86% of the world’s palm oil.
That’s not to say the drop in output will be so severe this time as new plantations are coming into production. Indonesian palm oil output will stagnate or fall about 3% to between 30.6 million tons and 32.3 million tons in 2016, Bayu Krisnamurthi, the head of the government-appointed Indonesia Estate Crop Fund for Palmoil, said this month.
While estimates varied on how much palm would be used as biodiesel in 2016, most delegates predicted an increase. Krisnamurthi says Indonesian demand may climb to at least 7.1 million kiloliters (1.9 billion gallons) from 1.3 million kiloliters this year.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
The most consumed cooking oil found in everything from candy to instant noodles has jumped 26% from a six-year low in August after drought and smog hurt plantations in Southeast Asia. At the same time Indonesia is raising the amount of palm blended with diesel to 20% from 15%. That’s boosted futures as prices of other farm commodities slump.
“El Nino and the Indonesian biodiesel mandate are a powerful cocktail that has the potential to drive prices in 2016,” Dorab Mistry, director of Godrej International, said in an interview.
This El Nino will probably rank among the three strongest since 1950, the World Meteorological Organization says. It’s comparable to record events in 1997-98 and 1982-83, according to the Australian government. Output fell 5.5% in Malaysia and 7.2% in Indonesia in 1998, US Department of Agriculture data show. Production slid 5.1% in Malaysia in 1983. The two countries supply about 86% of the world’s palm oil.
That’s not to say the drop in output will be so severe this time as new plantations are coming into production. Indonesian palm oil output will stagnate or fall about 3% to between 30.6 million tons and 32.3 million tons in 2016, Bayu Krisnamurthi, the head of the government-appointed Indonesia Estate Crop Fund for Palmoil, said this month.
While estimates varied on how much palm would be used as biodiesel in 2016, most delegates predicted an increase. Krisnamurthi says Indonesian demand may climb to at least 7.1 million kiloliters (1.9 billion gallons) from 1.3 million kiloliters this year.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
0 comments:
Post a Comment