KUALA LUMPUR: Palm oil bears are growing in confidence this year with production in the two largest growers expected to surge as plantations recover from the scorching effects of El Nino. That will be a key focus as traders and executives gather in Malaysia’s capital for an annual palm oil conference starting Monday. Olam International Ltd., one of the world’s largest food traders, is among those predicting the fall, saying in earnings last week they are bearish on palm oil from the late second quarter onward.“Sluggish palm oil demand and expectation that palm production cycle will shift to a seasonal uptrend from March continue to provide downward pressure for palm oil prices,” RaboResearch’s Tjakra said in emailed responses to questions. Recent observations suggest the likelihood of El Nino in 2017 has risen to about 50 percent, according to Australia’s Bureau of Meteorology on Feb. 28. Trump is friendly toward coal, mineral oil and gas, and higher production will keep Brent oil prices within the $50 to $60 range, he said.“That will automatically keep a lid on discretionary demand for palm biodiesel,” Mistry said.

Source: The Star March 06, 2017 02:48 UTC