Exciting Weather Market Ahead; This Year’s Supply of Vegetable Oils
[dmg world media (uk) Ltd] The weather is going to be key to this year’s supply of vegetable oils as world stocks are low and can be wiped out by a crop failure in any one producing location, the MDEX Annual Palm and Lauric Oils Conference and Exhibition heard in March.
“This year, the safety margin is only one million tonne,” Dorab Mistry of Godrej International told the conference in Kuala Lumpur, Malaysia, which attracted a record 1,300 visitors from 41 countries.
Oil production was expected to expand by about 5M tonne and world consumption by 4M tonne.
“However, production growth is very much dependant on good to normal weather in every part of the world,” Mistry warned.
He predicted that prices would stay bullish up to April, after which South American soyabean oil would exert its usual seasonal pressure on prices. However, this pressure could be short-lived.
“The period from July to October could be very interesting if the demand engines of China, India, Pakistan and Bangladesh begin to crank in unison.”
Strong demand could easily absorb additional production.
However, normal rainfall from November onwards could give big crops and lead to a decline in prices in the last quarter of the year.
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