Malaysia’s palm oil output is likely to be lower in the February-March period as floods in Sabah state have made transportation and harvesting of palm fruits difficult, and this will boost palm oil prices as exports improve, Lee Yeow Chor, group executive director at IOI Corp. (1961.KU), said Tuesday.
Bad weather conditions in the top oil palm producing state of Sabah "may have multiplier effect on palm oil," Lee said on the sidelines of an industry conference.
Lee, who is also chairman of the Malaysian Palm Oil Council, said palm oil prices may rise to MYR2,500-MYR2,700 levels in the next three months. He expects palm oil exports to improve in 2010 on rising demand from China and India–both major vegetable oil consumers–as well as from the African continent and Bangladesh.
As exports increase amid lower output, palm oil inventories may ease from December's level of 2.24 million tons–a 13-month high–which is bullish for prices, analysts said.
Cargo surveyors estimated January exports of palm oil had risen more than 20% on month to 1.48 million to 1.50 million tons.
Benchmark BMD April CPO futures were last trading MYR9 lower at MYR2,436 a metric ton.
-By Shie-Lynn Lim, Dow Jones Newswires; +60320261233; shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
February 02, 2010 02:39 ET (07:39 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.
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