Wednesday, 3 September 2008

Palm oil seen rising to 2,900 rgt by Dec - Mielke

SIEM REAP, Cambodia, Sept 3 (Reuters) - Malaysian crude palm oil futures are likely to rise to 2,900 ringgit ($844.5) per tonne by December on strong demand and lower output yields, leading industry analyst Thomas Mielke said on Wednesday.

The price of the reddish-brown vegetable oil slid about 17 percent this year and halved from an all-time high of 4,486 ringgit hit in March, due to a knock-out combination of high stocks and news of defaults from key buyers India and China.

"In December the price should be around 2,700 to 2,900 ringgit for the third month contract. We expect increases in prices from here for several reasons," Thomas Mielke told reporters on the sidelines of a regional grains conference in Cambodia.

"Global demand for palm oil is going to pick up due to the very wide price discounts of palm oil relative to soyoil and other vegetable oils. Palm oils discounts are unusually high at the moment whatever locations you take," he said.

Mielke, head of German oilseeds research outfit Oil World, said the differential between the two products was as high as $500 in the Rotterdam market at the end of August, with crude palm oil being quoted at $835 per tonne and crude soyoil at $1,338 per tonne.

Malaysian crude palm oil rose more than 1 percent on Wednesday as the price of crude oil bounced back from Tuesday's low, and a weaker ringgit currency against the U.S. dollar provided some support. ($1=3.434 Malaysian Ringgit)

(Reporting by Naveen Thukral, w


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