Palm-oil use is poised to rise at an above-average pace in the six months through September on a price discount to other oils and fats amid expected record production, Oil World said.
Global palm-oil production is forecast to climb 7 percent to 55.7 million metric tons in the 2012-13 season, the Hamburg- based researcher said in an e-mailed report today. That compares with reduced availability for alternative oils in the period’s first half, which ended last month.
“Consumers worldwide will stay highly dependent on palm and palm-kernel oils also in the second half of this season, mainly on account of the insufficient supplies of cotton, groundnut, sun, rape and olive oils,” Oil World said.
Palm oil slumped 33 percent on the Malaysia Derivatives Exchange in the past year on rising production. That was triple the 11 percent drop for soybean-oil futures in Chicago.
“Palm oil has become the dominant oil in recent years, surpassing soya oil,” Oil World said. “Virtually all the growth in output and export supplies of both oils will occur in Indonesia and Malaysia, making the global market particularly sensitive to the supply developments in these two origins.”
The two Asian nations are the world’s biggest palm-oil producers. India is the leading importer, followed by China.
Consumption of palm oil and palm-kernel oil is set to jump by 2.4 million to 2.5 million tons in the April-September period from a year earlier, according to the report. That would follow a 2.3 million-ton gain in the first half of 2012-13, it showed.
World imports of palm and palm-kernel oils will climb to 43.2 million tons from 40.3 million tons in 2011-12, Oil World forecast. European Union palm-oil imports may rise to 6.43 million tons from 5.83 million tons, while India’s purchases are seen advancing to 8.08 million tons from 7.47 tons. China’s imports of the oils are seen increasing to 6.75 million tons from 5.95 million tons.
“In response to the remarkable price attractiveness, world imports of palm and palm-kernel oils have increased sharply so far this season and will continue to exceed the year-earlier levels in the further course of 2012-13,” Oil World said.
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