Malaysian analyst projects that palm oil futures set to come down
In Malaysia, a report by TransGraph projected that palm oil futures in Malaysia could fall as much as 4.7 percent by the end of October due to increased production in India. Price points were $723 per metric ton. Indonesia and Malaysia produce 85% of the world’s palm oil, and are expected to increase production to 35.2 million metric tons in 2008, versus 32.4 million tons in 2007. India produced 16 million metric tons of oil from seeds, primarily from peanuts and soybean.
Earlier this year, skyrocketing palm oil prices are expected to delay the opening of four new Malaysian biodiesel facilities scheduled to open in 2007.
Government officials had said at the time that unless world oil prices increase higher than the current $82 a barrel, or the four plants consolidate to achieve economies of scale, they do not see plants opening this year unless palm oil prices receded.
Palm oil futures are up 28 percent this year and 80 percent over 2005.
Singapore has announced plans to triple biodiesel production at Jurong Island by 2015, citing the proximity to Malaysian palm oil producers. At the same time, Indonesia, Thailand and the Philippines have announced that they plan to increase palm oil production cultivation to 5 million acres. In Malaysia, MyFuel will invest $46 million in two palm-oil biodiesel plants at the Port Klang Free Zone (PKFZ), which will produce 350,000 metric tonnes of biodiesel per year. The plants will open in June 2008.
