Crude palm oil price reaches all time record of $829 per tonne

In Malaysia, crude palm oil futures reached an all-time record as palm oil tracked the increases in crude oil prices. The Bursa Malaysia Derivatives Exchange January contract closed as $829.43 a tonne.

Earlier this month, 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.

At the same time, CIMB Research increased its forecast for palm oil prices to $760 per tonne in 2007 and $810 in 2008. This represents a 60% price increase in 2007 and 8.5% in 2008. They pointed to increased biofuels and food-related demand, and bad weather, were responsible for the increases.

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.

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