BLBG:Palm Oil Trims Weekly Loss as Global Production Growth May Slow
Palm oil gained, erasing earlier losses, on concern that slowing production growth in Indonesia and Malaysia, the biggest growers, may pare global cooking oil stockpiles and on a prediction for higher prices.
The February-delivery contract rose 0.1 percent to close at 3,062 ringgit ($979) a metric ton on the Malaysia Derivatives Exchange. It fell 0.8 percent earlier. Futures dropped 0.2 percent this week, for a second weekly decline.
Global production growth may start to slow down and “turn negative” by the middle of 2012, said James Fry, chairman of LMC International Ltd. The slowdown in output will cut stockpiles, he said at a conference in Bali, Indonesia.
Futures in Malaysia may advance to 3,300 ringgit a ton by January and “gradually” climb to 4,000 ringgit by June, said Dorab Mistry, director of Godrej International Ltd., keeping a forecast made in July. Malaysian production may be “flat” in 2012, between 18.6 million and 19 million tons, while output in Indonesia may reach 26.5 million tons on new acreage, he said at the same conference.
“With growth in CPO production decelerating and demand remaining buoyant, prices must rise,” said Mistry, referring to crude palm oil by its initials. “In years when palm oil production growth is so low and demand growth is normal, we see bull markets.”
January-delivery soybeans increased as much as 0.7 percent to $11.3625 a bushel on the Chicago Board of Trade. Soybean oil for delivery in the same month gained as much as 0.5 percent to 49.95 cents per pound.
Palm oil for May dropped 0.2 percent to close at 7,958 yuan ($1,251) per ton on the Dalian Commodity Exchange and soybean oil for the same month shed 0.2 percent to 8,820 yuan.
To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
