Palm oil may average 7.1 percent higher in 2010 than previously forecast, driven by supply shortages and dry weather caused by El Nino, BNP Paribas SA said.
The commodity may average 2,625 ringgit ($549) a metric ton this year, compared with an earlier forecast of 2,450 ringgit a ton, the bank’s Michael Greenall and Helmy Kristanto said today in a report. Prices may reach 2,800 ringgit a ton in the first half, BNP said.
An El Nino weather pattern, which can cause drought in parts of the Asia-Pacific region and Australia, started in May and will be a “significant occurrence,” BNP said. Royal Bank of Scotland Asia Securities (Singapore) Pte. also raised its palm oil forecast this week.
“We believe the current tightness in crude palm oil supply will keep prices firm and, if El Nino develops into a stronger event, crude palm oil and other oilseed price strength would extend into second half 2010,” the BNP report said. The bank expects the strongest prices in the first half of this year.
Still, BNP lowered its forecast for 2011 by 2 percent to 2,500 ringgit a ton, and predicted an average 2,450 ringgit a ton in 2012.
Palm oil for April delivery climbed as much as 0.9 percent today on the Malaysia Derivatives Exchange and traded 0.6 higher at 2,444 ringgit a ton at the 12:30 p.m. local time trading break. Palm oil has gained 37 percent in the past year and averaged 2,230.96 ringgit in 2009.
To contact the reporter on this story: Madelene Pearson in Mumbai on mpearson1@bloomberg.net
More Recent Palm Oil News 
- Crude Palm Oil Ends Marginally Lower In Choppy Trade
- Palm Oil Declines on Crude, South American Soybean Crop Concern
- Crude Palm Oil Stumbles On Long Liquidation, Profit-Taking
- “Green” Palm Oil Output May Double As Prices Rise
- Malaysian Windfall Tax Capping Palm Oil Price Rise
- Palm Oil Refineries Should Venture Into More Downstream Value-Added Products
- Follow Palm Oil HQ On Twitter
- Soyoil Subsidies Create Artificial Price, Says MPOC
- Crude Palm Oil Ends Down; Weak Cash Demand, Long Liquidation
- Bigger crowd, more Americans at palm oil meet
- Europe Still Largely Depends On Palm Oil, Says MPOC
- Neste Oil’s growing palm oil use for biofuels
- Crude Palm Oil Futures End Lower On Profit-Taking
- Bursa Malaysia, Dalian China Hail Palm Oil Futures Competition From Jakarta
- Indonesia to export only 50% of CPO output by 2015
PRO Palm Oil Live Market News
- India Soyoil Futures Up 1% At 1-Week High
- Malaysian Cash Market Prices For Palm Oil – March 17
- BMD Crude Palm Oil (CPO) Up;Narrow CPO Discount To Soyoil To Weigh
- Malaysia Opens Commodities Training Center To Stay Ahead
- BMD Crude Palm Oil (CPO) Up On Soyoil; Trade Thin; Lack Of Cues
- India Soybean Futures Likely Up On Firm CBOT
- BMD Crude Palm Oil (CPO) May Open MYR10 Up On Soyoil
- Southeast Asia Palm Oil Weather – Mar 16
- SUBSCRIBERS: European Veg Oil PM Palm Oil & Lauric Oil Prices
- CBOT Soy Outlook: Up 2-4c, Firm Cash, Outside Market Support
- European Veg Oil AM Palm Oil & Lauric Oil Prices – Mar 16
- India Nafed Floats Import Tender For 3,000 Tons RBD Palm Olein
- *India Nafed Floats 3,000 Tons RBD Palm Olein Import Tender
- SUBSCRIBERS: No India Commodity Prices Including Palm Oil – Agriculture Tuesday
- Crude Palm Oil Ends Marginally Lower In Choppy Trade